The Philippine economy recorded its lowest growth rate under the administration of President Rodrigo Duterte as gross domestic product (GDP) expanded by only 6.2% in 2018 amid an elevated inflation rate and global slowdown.
This was below the revised growth target of 6.5% to 6.9% for 2018, and lower than the 6.7% in 2017 and 6.8% in 2016.
The Philippine Statistics Authority (PSA) reported on January 24 that the GDP, defined as the total amount of goods and services produced within the country, grew by 6.1% in the fourth quarter of 2018 from the revised 6% recorded in the third quarter.
This brought to 6.2% the full-year GDP growth for 2018.
In a joint statement, the country’s economic managers said the economy has turned in a steady performance, as growth has been more than 6% for the 7th consecutive year.
Over the last 10 quarters under the Duterte administration, they said growth has averaged 6.5%.
“This is a firm finish that cements the Philippines’ standing as one of the fastest-growing economies in Asia. We are next to India, Vietnam, and China. From Q1 to Q3 of 2018, we overtook Indonesia and Thailand in terms of economic performance,” the statement from the National Economic and Development Authority, Department of Finance, and Department of Budget and Management stated.
The statement noted that manufacturing grew by only 3.2% in the last quarter of 2018, a deceleration from 7.9% in the last quarter of 2017.
“This is due to the continuing US-China trade dispute, which dampened global demand, and the series of oil price increases in the world market as a result of the sanctions on Iranian oil exports,” they said.
Agriculture also slumped, growing by only 0.8% compared to 4% last year.
Government blamed this on the typhoons that hit Luzon, and the inadequate irrigation and insufficient rainfall in Central Visayas.
For this year, they warned that the re-enactment of the 2018 budget will likely have an impact on government spending in the near term.
“This implies that the government would not be able to quickly execute programs and projects under the proposed 2019 budget. The 45-day ban on state spending prior to the May 2019 elections could also further delay implementation of infrastructure projects,” they stated.
Read: Joint Statement of the Economic Team
This year’s growth will be driven by the May elections and the country’s preparations for the Southeast Asian Games in November.
Government also expects household consumption to recover as inflationary pressures subside, given a subdued outlook on international oil prices and the expected reduction in rice prices from the enactment of the Rice Tariffication Law.
“We will continue to be on the lookout for downside risks such as the US-China trade dispute dampening global demand, with higher tariffs and protectionist policies stifling investment and disrupting global value chains,” the economic team said.
Other external downside risks are tighter financing conditions in emerging markets due to the strengthening of the US dollar and rising risk premiums, as well as heightened geopolitical tensions, they added. (Ventures Cebu)