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Philippines leads Asia growth in Duterte’s watch

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(Photo from Philippine Daily Inquirer)

 

MANILA ― The Philippines became developing Asia's fastest-growing major economy in President Rodrigo Duterte's first three months in office.

 

This as the country’s economy expanded at its quickest pace in three years at 7.1 percent on-year in July-September, beating the consensus forecast of 6.8 percent, according to Economic Planning Undersecretary Rosemarie Edillon.

 

The Philippines’ record was faster than China's 6.7 percent and beat other major emerging economies for the same period, Edillon said.

 

The news surprised experts after Duterte sparked concerns among foreign investors over his controversial war on drug crime and a decision to pick fights with the United States and the United Nations on the issue.

 

"All things considered, our economy's strong growth in the third quarter is a very good sign of things to come," Edillon added.

 

The Philippine Statistics Authority (PSA) announced that the country’s gross domestic product (GDP) grew by 7.1% in the three months ending in September. GDP is the amount of final goods and services produced in the country, and as such is the conventional measure of economic performance.


The latest headline growth figure is a notch higher than the previous quarter’s 7% and the highest since the 7.9% clocked in the second quarter of 2013.

During a press briefing, National Economic and Development Authority (NEDA) National Planning and Policy Staff Director Reynaldo Cancio said the latest GDP figure makes the Philippines the fastest growing in the region, ahead of China’s 6.7%, Vietnam’s 6.4%, Indonesia’s 5%, and Malaysia’s 4.3%. India -- which beat the Philippines in the second quarter -- has yet to release its data.

“This cements our chance of achieving our target of 6-7% for the whole of 2016,” Mr. Cancio said, adding, “This growth is above median market expectation of 6.8%.”

The first three quarters saw 7% growth, compared to the 5.7% clocked in 2015’s comparable period. Mr. Cancio said the country needs to grow this quarter by at least 3.4% to reach the 6% lower end of the full-year target, and by 6.9% to reach the 7% higher end.

Industry helped fuel economic expansion last quarter on the back of a pickup in construction and manufacturing. From 7.1% in the second quarter, industry grew 8.6% in the latest three-month period. Construction grew 15.5%, whereas manufacturing expanded by 6.9%.

Agriculture also contributed to the overall economic expansion, after turning around to a growth of 2.9% in the latest quarter from five quarters of contraction.

On the expenditure side, household spending remained a pillar of strength, having grown 7.3% in the third quarter, albeit slower than the previous quarter’s 7.4%. “The higher private consumption is supported by low inflation, low interest rates and better labor market conditions,” Mr. Cancio said.

But what fueled expansion the most was capital spending, as construction grew by 16.8%, faster than the 15.4% the previous quarter. The growth here was broad-based as both government and private sector build-up quickened.

“Our economy’s strong growth in the third quarter is a very good sign of things to come. Robust domestic demand will continue to bolster growth in the near-term,” Mr. Cancio said.

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