MANILA -- The Department of Finance (DOF) is still optimistic that the Philippine economy's momentum will get back on track after it “took a breather” in the second quarter of 2018.
From April to June this year, the economy registered a 6 percent expansion, as measured by gross domestic product (GDP), slower than the previous quarter’s 6.6 percent.
In an economic bulletin, the department said the slower growth in the second quarter was due to the deceleration of the manufacturing sector from 7.6 percent from January to March this year to 5.6 percent; and the agriculture sector, which grew by 0.2 percent from 1.1 percent in the previous quarter.
Despite this development the bulletin said “there is a silver lining” after noting the 20.7 percent rise in capital formation on the back of the 28.6 percent increase of durable equipment.
Also, it cited the recovery of exports after it grew 13 percent from quarter-ago’s 6.5 percent.
“These imply that the economy will be able to recover lost ground in the next quarters as the equipment and factories set up in the second quarter will start operations,” it said.
With faster output needed in the second half of the year to meet the government’s seven to eight percent target, the bulletin said investment needs greater focus.
“Government should keep its focus on enhancing the country’s long-term prospects by increasing the economy’s productive capacity (through infrastructure and social services) while maintaining macroeconomic stability,” it said.
The current government has identified 75 priority projects under its infrastructure program called “Build, Build, Build” and these are seen to ensure sustained and long-term growth of the domestic economy.
It targets to spend at least PPH8 trillion until the end of its term in 2022 for these projects, some of which will be financed by official development assistance (ODA) funds.
DOF's bulletin added that “while CPI (consumer price index) inflation has remained elevated, the broader GDP deflator-based inflation shows a 3.1 percent price increase for all consumer and investment goods.” (PNA)
