The Philippine economy grew in the third quarter at its slowest pace in nearly three years due to weak public spending, putting at risk President Benigno S. Aquino III’s goal of boosting the nation’s annual expansion to a record by 2016.
The country’s economy, as measured by its Gross Domestic Product (GDP), grew by 5.3 percent from July to September this year, a significant decline from the 7.0 percent in the same period last year, data from the Philippine Statistics Authority (PSA) revealed.
But despite the slowdown, the Philippines is still among the fastest-growing economy among major Asian nations, but behind China, Vietnam, and Malaysia.
The Philippines aims to increase its GDP by 8.5 percent when President Aquino’s term ends in 2016.
“The third-quarter economic performance shows a mixed picture of the private sector treading a more stable upward trajectory, government adjusting to new spending protocols, and then, the lingering negative impact of typhoon Yolanda and other calamities,” Socio-economic Planning Secretary Arsenio M. Balisacan said.
The third-quarter expansion was well-below analysts’ expectations, with a Reuters poll of economists forecasting annual growth at 6.6 percent, the slowest since the 4.0 percent in the last quarter of 2011.
Since the Aquino administration took office in 2010, the government has consistently failed to meet its monthly spending target, especially after the Supreme Court’s decision on the Disbursement Acceleration Program (DAP).
Balisacan said public construction contracted from a double-digit growth of 19.1 percent to -6.2 percent in the third-quarter this year due to lags in the submission of documentary requirements for spending by the government agencies.
“Although this year, the General Appropriations Act (GAA) is now considered a release document, for certain big-ticket items, the GAA stipulates certain conditions prior to budget release,” Balisacan said. In the quarter ending September, growth was driven by manufacturing, trade, real estate, renting and business activities, and construction.
The slowdown in sub-sectors such as financial intermediation and contractions in agriculture and public administration “tempered the pace of growth.” The agriculture sector also held down the country’s economy during the quarter, with agri spending dropping 2.7 percent.
Crop production, which accounts for 44.5 percent of the total output of the sector, contracted 5 percent, with losses from palay, corn, coconut, and other crops. “Palay production was adversely affected by typhoons Glenda and Luis and the onset of habagat.
Regarding coconut, farms in the Visayas are yet to recover from typhoon ‘Yolanda’ in addition to the scale insect infestation,” Balisacan said. With the slowing economy, Balisacan said, the government’s growth target of 6.5 percent to 7.5 percent this year will be very challenging.
From January to September this year, the Philippines’ average economic growth was 5.8 percent. To hit even the low end of the target growth rate for the year, “we need to grow by at least 8.2 percent in the fourth quarter, and we at the DBCC will brainstorm intensively on how we can come as close to this figure as possible,” Balisacan said.
The DBCC or the Development Budget Coordination Committee is an interagency body that sets the country’s macroeconomic assumptions. Despite the disappointing GDP growth, Balisacan remains optimistic that the nation’s future remains bright.
“Expect the private sector to maintain our robust performance. Government will have adjusted to the new protocols, and we see this in the most recent preliminary data coming from the DBM. The reconstruction assistance in Yolanda-affected areas is already gaining traction,” Balisacan said.
yahoo.com
The country’s economy, as measured by its Gross Domestic Product (GDP), grew by 5.3 percent from July to September this year, a significant decline from the 7.0 percent in the same period last year, data from the Philippine Statistics Authority (PSA) revealed.
But despite the slowdown, the Philippines is still among the fastest-growing economy among major Asian nations, but behind China, Vietnam, and Malaysia.
The Philippines aims to increase its GDP by 8.5 percent when President Aquino’s term ends in 2016.
“The third-quarter economic performance shows a mixed picture of the private sector treading a more stable upward trajectory, government adjusting to new spending protocols, and then, the lingering negative impact of typhoon Yolanda and other calamities,” Socio-economic Planning Secretary Arsenio M. Balisacan said.
The third-quarter expansion was well-below analysts’ expectations, with a Reuters poll of economists forecasting annual growth at 6.6 percent, the slowest since the 4.0 percent in the last quarter of 2011.
Since the Aquino administration took office in 2010, the government has consistently failed to meet its monthly spending target, especially after the Supreme Court’s decision on the Disbursement Acceleration Program (DAP).
Balisacan said public construction contracted from a double-digit growth of 19.1 percent to -6.2 percent in the third-quarter this year due to lags in the submission of documentary requirements for spending by the government agencies.
“Although this year, the General Appropriations Act (GAA) is now considered a release document, for certain big-ticket items, the GAA stipulates certain conditions prior to budget release,” Balisacan said. In the quarter ending September, growth was driven by manufacturing, trade, real estate, renting and business activities, and construction.
The slowdown in sub-sectors such as financial intermediation and contractions in agriculture and public administration “tempered the pace of growth.” The agriculture sector also held down the country’s economy during the quarter, with agri spending dropping 2.7 percent.
Crop production, which accounts for 44.5 percent of the total output of the sector, contracted 5 percent, with losses from palay, corn, coconut, and other crops. “Palay production was adversely affected by typhoons Glenda and Luis and the onset of habagat.
Regarding coconut, farms in the Visayas are yet to recover from typhoon ‘Yolanda’ in addition to the scale insect infestation,” Balisacan said. With the slowing economy, Balisacan said, the government’s growth target of 6.5 percent to 7.5 percent this year will be very challenging.
From January to September this year, the Philippines’ average economic growth was 5.8 percent. To hit even the low end of the target growth rate for the year, “we need to grow by at least 8.2 percent in the fourth quarter, and we at the DBCC will brainstorm intensively on how we can come as close to this figure as possible,” Balisacan said.
The DBCC or the Development Budget Coordination Committee is an interagency body that sets the country’s macroeconomic assumptions. Despite the disappointing GDP growth, Balisacan remains optimistic that the nation’s future remains bright.
“Expect the private sector to maintain our robust performance. Government will have adjusted to the new protocols, and we see this in the most recent preliminary data coming from the DBM. The reconstruction assistance in Yolanda-affected areas is already gaining traction,” Balisacan said.
yahoo.com
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