GDP growth seen at slower 6.5% in 2018

MANILA, Philippines — The economy likely grew by 6.5 percent in 2018, within the lower range of the government’s gross domestic product (GDP) growth target for that year, the Department of Budget and Management (DBM) said yesterday.

During his weekly press briefing, Budget Secretary Benjamin Diokno said the country’s real GDP is estimated to have grown by at least 6.5 percent last year, driven mainly by investments in infrastructure and human capital.

This is, however, slower than the 6.7 percent GDP growth recorded in 2017.

“The country’s growth is domestic-driven as we invest heavily in our infrastructure through the Build Build Build program, and we also do the same for our human capital,” Diokno said.

Economic managers earlier revised the government’s economic growth target to 6.5 to 6.9 percent from the previous goal of seven to eight percent.

As of end-September 2018, the country’s GDP growth averaged 6.3 percent, after third quarter growth settled at 6.1 percent. The fourth quarter figure has yet to be released.

According to Diokno, a 6.5-percent economic expansion in 2018 would bring the Duterte administration’s average GDP growth to 6.6 percent in the first two years of its term.

He said this is the highest level of growth among the first two year performances of post-Marcos administrations.

The budget chief said growth, under Duterte’s term, has become more investment-led, with the industry sector’s expansion outpacing real GDP growth at seven percent.

“This is crucial for the Philippine economy to achieve its poverty-reduction goals. The industry sector is a potential source of high-paying jobs. This will allow those from the rural sector to lift their families out of poverty,” he said.

However, Diokno also admitted that the administration needs to improve its performance in the agriculture sector, which has been a laggard among all industry groups.

Citing historical data, he said the sector has the potential to grow by four percent and beyond, as demonstrated by the Estrada and Arroyo administrations.