Socioeconomic Planning Secretary Ernesto Pernia remains hopeful about achieving at least the low-end of the 7 to 8-percent growth target range for the year with the implementation of policies towards attracting more investments.
Pernia said the Philippines remained one of the best-performing economies in Asia after Vietnam at 6.8 percent growth and China at 6.7 percent growth, even as the second-quarter growth rate is “less than what we had hoped for.”
The country posted a 6 percent gross domestic product (GDP) in the second quarter.
“Yes, it’s still possible (to hit target range), it is just if we are able to get the policies that we are proposing… We have six months to do that. It is possible, we can say it is certain,” he said in a press conference Thursday following the release of the second-quarter economic data.
Pernia pointed out that the immediate approval of the 11th Regular Foreign Investment Negative List (FINL) should be prioritized to reduce foreign investment restrictions.
“Together with the proper implementation of the Ease of Doing Business Act, this will surely encourage more investments from both foreign and domestic sources,” he noted.
Pernia said the Philippine economy would have to expand by at least 7.7 percent in the second semester to attain the low-end of the 7 to 8 percent GDP for 2018.
The country’s GDP expanded by 6.3 percent in the first half of the year. It was pulled up by the 6.6 percent growth in January to March.
The chief of the National Economic Development Authority is also hopeful that the timely implementation of the “Build, Build, Build” program bodes well with the construction industry, and is seen to boost not only public construction but private builders as well.
In the services sector, the immediate facilitation of the possible entry of a third player in the telecommunications industry will enhance the efficiency of communications, and support the growth of small business, particularly retail trade, he said.
“Further, the resumption of tourism activities in Boracay Island by October gives us good reason to be bullish about prospects for tourism and other service sectors in the fourth quarter,” he said.
Pernia attributed the slower second-quarter economic growth to policy decisions undertaken that are expected to promote sustainable and resilient development.
He said the temporary closure of Boracay Island from April to October 2018 partly made a dent on the economy with growth in exports of services slowing to 9.6 percent in the second quarter from 16.4 percent in first quarter.
He pointed out that the mining and quarrying sector declined 10.9 percent with the closure of several mining pits and the excise tax on non-metallic and metallic minerals.
“Moreover, the stricter enforcement of regulations on aquaculture producers at Laguna Lake resulted in the drop of freshwater fish catch,” he said.
Pernia said industry growth is slower at 6.3 percent in the second quarter, as manufacturing softened on the back of strict regulations of controlled chemical and chemical products, coupled with the high rates charged by shipping companies for transporting chemicals.
He said the almost stagnant output of the agriculture sector, supporting their premise that the main reason behind the country’s high inflation is the gross deficiency in the domestic production of food, which was not augmented by imported goods, especially rice.
Palay, corn, sugarcane and mango harvests for the quarter were dismal. Coconut including copra, livestock and poultry production all reported weak output.
“Rice tariffication is a crucial measure to address food supply issues and their consequent impact on inflation. It will reduce the policy uncertainty in rice trade, and hopefully, encourage more productive investments in the sector,” he said.
Meanwhile, the Philippine Statistics Authority (PSA) reported that services recorded the fastest growth at 6.6 percent in the second quarter of 2018.
Industry followed with a growth of 6.3 percent, and agriculture with a growth of 0.2 percent.
The PSA said manufacturing, trade and construction were the main drivers of growth for the quarter.