Workers check the tie of dozens of plastic tubes if it is tight in a construction site along Claveria Street in Davao City. (davaotoday.com file photo by Ace R. Morandante)
TAGUM CITY—The country’s economy grew by 6.9 percent in the first quarter of 2016, the fastest in the Association of Southeast Asian Nations and outpacing China for the first time in 27 years, the Department of Finance announced on Thursday, May 19.
The GDP growth rate is the highest quarterly growth rate in almost three years since the second quarter of 2013. This marks the 69 straight quarters of growth and 17 consecutive quarters of above five percent GDP growth, said Finance Secretary Cesar V. Purisima in a statement.
He said the driving growth for the quarter is capital formation at 23.7 percent (highest in 10 quarters), particularly fixed capital formation, at 25.5 percent (highest in 23 quarters), equivalent to 5.8 percentage points of real GDP growth.
Purisima claims the recent growth rate was “a sign of ever increasing investor confidence in our trajectory as people continue to bet on the Philippines for the long haul.”
He added that consumer confidence maintains its robust character, with this quarter’s consumer optimism matching the all-time high recorded in the second quarter of 2013.
“This is reflected in the 7.0 percent jump in household consumption, buoyed by low and stable prices and record unemployment at 5.8 percent in the January Labor Force Survey, the lowest in a decade. Enjoying the benefits of a better credit standing, commercial vehicle sales leapt 23.4 percent this quarter, owing in large part to attractive financing options and lower costs of borrowing,” Purisima said.
Meanwhile, government consumption accelerated by 9.9 percent as the public sector continues to use our vastly expanded fiscal space to invest in our people. He also pointed out that “public construction accelerated by 39.9 percent this quarter, as the government completes road network projects and capital outlays in health and education.”
Purisima noted that tourist arrival figures expanded 15.1 percent compared to the 6.3 percent posted a year ago, pushing travel growth to 7.8 percent compared to the 0.2 percent contraction same period last year.
On the other hand, miscellaneous services exports grew 12 percent due to the sustained strength of the Information Technology-Business Process Outsourcing industry,” which now employs 1.3 million Filipinos and takes an eight percent slice of the GDP, fueling a virtuous cycle of consumer confidence and domestic demand,” he added.
He said that macroeconomic fundamentals remain sound with our current account surplus estimated at $8.9 billion or at least three percent of GDP.
“Our fiscal position is shaped for resiliency and sustainability, with a record debt-to-GDP ratio of 44.8 percent in 2015 and a foreign debt share of only 15.6 percent. Lengthened maturities (currently at 10 years), a heavy domestic financing bias (at 58 percent in 2015), less bunching up (only 11.1 percent of the total debt stock redeemed within the next 12 months), and lower interest rates (5.1 percent WAIR as of end-March 2016) make our debt structure built to withstand global turbulence. “
Purisima said that the running 6-year growth average of 6.2 percent was the country’s “fastest streak since 1978, which when compared to the 3.8 percent average from 1995-2010 reflects how much we have improved our structural growth capacity.”
“Over the past 6 years we committed to addressing our growth constraints, vastly ramping up education spending by 125 percent, social services by 166 percent, health by 336 percent, and infrastructure by 360 percent. This is an unprecedented amount of investment making up for lost time and fulfilling our aspirational growth requirements,” he said. (davaotoday.com)
