The country registered a 6.1 percent gross domestic product (GDP) in the third quarter, according to the National Economic Development Authority (NEDA) chief.
“We are not exactly exuberant about the 6.1 percent growth rate but still comforted that we remain one of the fastest-growing economies in Asia, next only to Vietnam at 7 percent and China at 6.5 percent,” NEDA Director General Ernesto Pernia said in an interview with CNN Philippines.
“We are concerned about third quarter growth numbers not because it fell below expectations but because of marked slowdown in household consumption, spending on food and other basic products,” he said.
Household final consumption demand grew by only 5.2 percent during the quarter from a growth of 5.9 percent in the previous quarter while household spending on food grew only by 2.8 percent in the quarter from 6.2 percent in the second quarter, according to Pernia.
“Slowdown in household consumption is abatable, temporary,” the NEDA boss assured.
Pernia also said inflation dragged the GDP growth.
“If it were not for high inflation we would have seen growth of 6.5 to 7 percent,” he said. “We need to expand by at least 7 percent in the fourth quarter to attain low end of target of 6.5 to 6.9 percent in 2018.”
On the demand side, Pernia said he sees robust growth as demand in the government sector grew by 14.3 percent while demand by firms or business grew 16.7 percent and export by 14.3 percent.
The services sector will remain as the main driver of growth in the near term, he predicted.
“Wholesale and retail trade and other services will primarily support the growth in the services sector, followed by real estate, renting and business activities, and public administration and defense,” he said.
He added, “The recent resumption of activities in Boracay will boost services growth over the medium term.”
“When Boracay was closed, tourists were diverted to other tourist destinations,” said Pernia.
Meanwhile, he urged implementation of measures to boost GDP.
“We urge Congress to pass without delay the rice tariffication bill which will reduce rice prices by P2 to P7 pesos per kilo,” said Pernia.
“We need to reform legal framework surrounding agriculture development and trade. Some of these are more than four decades old–very antiquated, fossilized, and ossified,” added Pernia.
The NEDA chief also called for the implementation of the Philippine export development plan and Ease of Doing Business law. WJG