The Philippine economy grew by 6.9 percent in the first quarter of 2016, the highest since 2013.
At a press briefing on Thursday, the Philippine Statistics Authority said the first quarter gross domestic product grew by 6.9 percent from 5.0 percent a year earlier.
Socioeconomic planning secretary and National Economic Development Authority (NEDA) director-general Emmanuel Esguerra said the growth is above market expectations given that the consensus forecast is 6.6 percent.
He also noted among 11 selected Asian economies that have released growth data for the quarter, the Philippines is the fastest-growing economy followed by China (6.7 percent), Vietnam (5.5 percent), Indonesia (4.9 percent), and Malaysia (4.2 percent).
The main driver of the first quarter GDP growth was the services sector which accelerated to 7.9 percent from 5.5 percent, according to Lisa Grace Bersales, national statistician and civil registrar general.
Also, the industry grew 8.7 percent from 5.3 percent, the highest in five consecutive quarters.
On the other hand, agriculture sector fell 4.4 percent, the fourth consecutive quarter decline since the second quarter of 2015, from a growth of 1.0 percent in first quarter of last year.
"Agriculture remains vulnerable to extreme weather events. These past two quarters, it was the impact of El Niño that considerably reduced agricultural output, similar to the 1998 episode," Esguerra noted.
Though the weather is transitioning to normal condition, he said the agriculture and fishery sectors will reel from the impacts of El Niño.
"We should also start preparing for the La Niña which now has a 75 percent probability of occurrence," he stressed.
Moreover, on the demand side, growth was investment-driven, according to the NEDA chief.
Fixed capital, which is better indicator indicator of investment growth, posted a 25.5 percent growth and contributed 5.5 percentage points to real GDP growth.
Construction grew at 12 percent, from 7.6 percent in the last quarter of 2015 and 4.5 percent in the first quarter of 2015.
Public construction increased to 39.9 percent from 23 percent last year. Private construction also grew by 7.1 percent from 1.1 percent.
"All these investments give us confidence that the economy will continue to perform well in the succeeding quarters of the year and beyond," the NEDA chief said.
Export of goods and services slowed down to 6.6 percent, while imports rose to 15.9 percent "largely due to increased purchases of capital goods, which again is an indication that firms are investing."
Services imports stood at 17.5 percent from 8.9 percent last year.
On track for the next quarters
Esguerra expressed optimism that the economy will be on track to meet full-year target of 6.8 to 7.8 percent.
"Growth in the second quarter of an election year is usually higher than in the first quarter," he said.
Also, business expectations remain are higher in the second quarter as shown by Bangko Sentral ng Pilipinas' (BSP) latest business confidence index rising to 49.6 percent from 43.9 percent.
Turning over to next admin
"We are pleased to be turning over a strong and stable economy onto the next administration," the NEDA chief said.
He added: "We have achieved significant socioeconomic progress over the last five years with the return of political and economic stability, which we hope the incoming administration will build on."
Esguerra expressed hopes that the economic agenda of the incoming administration — that includes agricultural development, increasing infrastructure spending and expanding the government’s conditional cash transfer program, among others — will continue and build on the gains of the last five years. — KG/RSJ, GMA News