By Beatrice M. Laforga
THE last three months of 2019 likely saw the economy grow at its fastest pace during the year, amid higher infrastructure spending, private construction and public consumption, Socioeconomic Planning Secretary Ernesto M. Pernia said.
Mr. Pernia told BusinessWorld that the country’s gross domestic product (GDP) might have expanded around “6.6-6.7%” in the fourth quarter.
On Thursday, the Philippine Statistics Authority will release the official data on the performance of the economy in the fourth quarter last year, and its full-year average.
If realized, a quarterly growth rate of at least 6.6% will be the fastest in more than two years, or since the seven percent growth recorded in the third quarter of 2017.
A 6.6% expansion will also outpace the 6.3% recorded in the last three months of 2018 and match the performance in the first quarter of the same year.
The economy grew by 5.6%, 5.5% and 6.2% in the first to third quarters last year, bringing the average to 5.8% during the January-September period.
In a mobile phone message on Friday, Mr. Pernia said “acceleration in government spending for infrastructure, private sector construction, stronger consumption spending given benign inflation and consumer optimism, SEA Games, PRRD’s (President Rodrigo R. Duterte) high approval and trust ratings” all contributed to the economic growth in the last quarter of the year.
Asked if the full-year average reached the narrowed 6-6.5% official target for 2019, he said: “yes!”
Public consumption should have benefited from easing inflation during the last three months, Mr. Pernia said, even as December’s print picked up to 2.5% in December from 1.3% in November and the 0.8% rate recorded in October.
For the full year, inflation rate for 2019 averaged at 2.5%, settling within the 2-4% official target range.
While infrastructure expenditure for November and December have yet to be released, latest available data showed that spending on infrastructure and other capital outlays was down by 12.9% year on year to P82.2 billion in October, reversing the 53.9% spike in the previous month.
However, overall state spending grew 22.36% to P365.6 billion in November from P298.8 billion a year ago.
Meanwhile, Mr. Pernia said the 11-day hosting of the 30th Southeast Asian (SEA) Games in early December likewise helped boost economic growth.
The economic team last December narrowed last year’s official growth target to 6-6.5% from 6-7%, abandoning the 7% growth goal, as the delayed passage of the 2019 budget slowed the economy during the first half.
For this year, the GDP growth target was maintained at 6.5-7.5%, while those for 2021 and 2022 was scaled down to the same target range from the previous 7-8% goal.
Mr. Pernia earlier said that they abandoned the 8% growth target over the medium term, amid slowing global economy due to the prolonged US-China trade war. This will likely hurt the country’s exports and dampen foreign investments in emerging economies like the Philippines.