DOF cites silver lining amid slowdown

Consumer electronics and office equipment also showed triple digit expansions.

Despite economic growth slowing down to 6 percent in the second quarter from 6.6 percent in the first quarter, the Department of Finance (DOF) said there is a silver lining in other fronts.

The DOF said Friday that capital formation soared to 20.7 percent on the back of strong 28.6 percent acceleration in durable equipment.

Exports of goods and services also recovered to a double-digit growth of 13 percent from 6.5 percent in the first quarter amid a rebound in electronics components, the DOF said.

Consumer electronics and office equipment also showed triple digit expansions, it added.

“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,” said DOF Undersecretary and Chief Economist Gil Beltran.

“Also, the rise in the goods trade deficit will be sustainably financed by a growing services trade surplus,” said Beltran.

Meanwhile, the DOF is keeping its eye on the bigger picture

“Growth, if it is to remain sustainably high, should be driven by investment,” it said.

Private construction is also picking up, according to the Department.

Public construction has accelerated to 22.1 percent in the first half of 2018, more than double the 9.3 percent growth in the same period last year, it said.

“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,” said the department.

“While CPI inflation has remained elevated, the broader GDP deflator-based inflation shows a 3.1% price increase for all consumer and investment goods,” it added.

The DOF blamed the lower gross domestic product from April to June 2018 to the slowdown in manufacturing to 5.6 percent from 7.6 percent in the first quarter and the slowdown in agriculture to 0.2 percent from 1.1 percent in the first quarter.