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Economy slows down to 6% in second quarter of 2018
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Economy slows down to 6% in second quarter of 2018

MANILA, Philippines, August 10 ------ As consumers grappled with rising prices, economic growth slowed down to six percent in the second quarter of the year from figures recorded in the previous quarter and in the same period last year. Based on latest data released by the National Economic and Development Authority (NEDA) yesterday, growth in the second quarter was slower than the revised growth figure of 6.6 percent in the first quarter of this year and 6.6 percent in the second quarter of 2017.

Some policy decisions of the government – including the closure and rehabilitation of Boracay island resort – contributed to slower growth, said Socioeconomic Planning Secretary and NEDA director-general Ernesto Pernia. But despite the slowdown, the Philippine economy is still among the best performing in Asia, following Vietnam and China, which registered growth rates of 6.8 and 6.7 percent, respectively, in the second quarter of the year.

“This growth rate is less than we had hoped for and what we expected,” said Pernia. “To be fair and put things in proper context, the slowdown is partly due to policy decisions undertaken that are expected to promote sustainable and resilient development,” he added.  “But, I emphasize, all measures should ensure sustainable and long-run growth for the economy. These policy decisions were prudent and judicious,” he added.

Aside from the temporary closure of Boracay from April to October, the closure of several mining pits and the imposition of excise tax on non-metallic and metallic minerals had contributed to the economic deceleration. The Boracay closure alone caused the slowdown in the growth of service exports to 9.6 percent in the second quarter from 16.4 percent in the first quarter. The stricter enforcement of aquaculture regulations in Laguna de Bay also resulted in the drop in freshwater fish catch.

The latest figure has put the average gross domestic product (GDP) growth in the first six months of the year to 6.3 percent, implying the economy would have to expand by at least 7.7 percent in the second semester to reach the low end of the seven to eight percent growth target for 2018. “We will have to double time to encourage sectors to be more productive and efficient in their activities,” Pernia said at a briefing.

The principal growth drivers of the economy in the second quarter of the year were the manufacturing, trade and construction subsectors. Among major sectors, services recorded the fastest growth at 6.6 percent, followed by industry with 6.3 percent, while agriculture continued to lag behind with a growth of 0.2 percent. NEDA noted, however, that domestic manufacturing activity softened on the back of strict regulations for controlled chemical and chemical products, coupled with high charges of shipping companies for transporting chemicals. With the country’s population reaching 106.2 million in the second quarter of 2018, per capita GDP grew by 4.3 percent. Pernia also noted that inflation continues to put pressure on the economy, particularly on the supply side.

Source: philstar.com