CEBU, Philippines - The Philippine economy grew slower by 5.8 percent in 2015 although it grew much faster in the fourth quarter at a pace of 6.3 percent, the government reported yesterday.
The full-year growth fell short of the government's 7-8% target for 2015 but gives the country a six-year average gross domestic product (GDP) growth of 6.2 percent, the highest since the late 1970s.
The growth in the fourth quarter was the highest in 2015 although it was lower than 6.6 percent posted in the same period in 2014. The Q3 growth was also upwardly revised to 6.1 percent from 6 percent.
"Services was the main driver of the economy at 6.7 percent growth from 5.9 percent the previous year. Industry and the entire agriculture decelerated with 6 percent and 0.2 percent from 7.9 percent and 1.6 percent, respectively," the Philippine Statistics Authority said yesterday.
Asked for his analysis on latest GDP data, Cebuano economist Fernando Fajardo said the declining exports last year really caused the growth slowdown. Exports grew only 5.5 percent last year from 11.3 percent in 2014.
Still respectable
In a statement, Outgoing Economic Planning Secretary Arsenio Balisacan said last year's growth "is still respectable given the difficult external environment, the onset of El Niño, and the challenges in government spending in the first semester."
He said growth in investment and consumption continued to support the economy despite challenges such as weather-related disasters, global economic slowdown and the upcoming election.
Balisacan noted growth last year was driven by a much stronger domestic demand, becoming among the fastest growing nations in Asia next to India, China and Vietnam.
For Fajardo, the Philippines did better than its Asian peers except China. "I do not think that trend has changed much," he told The FREEMAN yesterday.
Spending
Balisacan said government spending accelerated to 9.4 percent compared to 1.7 percent the previous year. "Growth in public and private investments also more than doubled to 13.6 percent from last year's 5.4 percent. This was primarily led by public construction, which grew by 20.6 percent from 6.3 percent in 2014," the official added.
Sought for comment yesterday, Lexter L. Azurin, equity research head at Unicapital Securities Inc., said weak government spending primarily affected growth.
"If you look at the other indicators, it's been growing at quite a healthy pace," Azurin told The FREEMAN.
"Despite the slowdown, we're still growing faster than our neighbors. And for 2016, it's the same story. We're pretty much insulated from the slowdown in China, since we're less dependent on trade," Azurin noted.
For the Philippine stock market, Azurin expects volatility to continue this year, still due to external factors from China and the US.
Balisacan said higher growth this year can be expected as the global economy picks up, supported by sound fundamentals and ongoing structural changes in the economy to make it more resilient to external shocks.
Fajardo, for his part, sees a much better economy this year partly because of the upcoming elections.
The economist explained: "...the global economy may just have the energy again to change its disappointing performance last year due to the declining growth in the Chinese economy that dominates the emerging economies and the inability of the advanced economies to return to their pre 2000-2009 global recession growth trends."
Balisacan further said the economy's capacity has to expand to support higher growth by investing into infrastructure development, efficient transport and logistics systems and competent human capital.
He also called for a review on the development strategy for the agriculture sector which persists to be the biggest roadblock in attaining inclusive growth and is affected by natural disasters yearly.
Next administration
Looking ahead, he said the country's next leaders must sustain the reforms that have made significant gains over the years.
"Now, in the coming elections, the challenge is for the Filipino voters to choose the right leaders who have the integrity and the ability to build strong institutions — credible institutions that can take the economy to an even higher level and significantly uplift the quality of life of the Filipino people," he said. (FREEMAN)