The challenge for the next national leaders is to keep up with the growing economic trajectory of the country that maintains, if not improves our spot in the top three major Asian economies. The country’s economic growth has slightly increased on the third quarter at 6 percent compared to 5.8 percent on the second quarter of this year and 5.5 percent growth last year. This makes the Philippines the third fastest growing economy in Asia next to Vietnam’s 6.8 percent and making China number 1 on the list with 6.9 percent.
Economic Planning Secretary and National Economic and Development Authority (NEDA) Director General Arsenio Balisacan said that growth in the first nine months of 2015 is now 5.6 percent. “[T]he 6-percent growth in the Philippines’ real gross domestic product in the third quarter of this year is certainly an encouraging sign of a steadily growing economy,’’ Balisacan said. This places the country third after China and Vietnam among the fastest-growing major Asian economies, he said.
This economic improvement was made possible because of increased government expenditure from 3.9 percent to 17.4 percent. “This simply shows that the government is proving successful in its efforts to overcome the spending bottlenecks that hampered growth in the first semester,” he said.
Balisacan also said that private consumption is also a great contributor. “With availability of more jobs, increasing employment and income, low inflation and inflow of overseas Filipino remittances,” he added.
Household consumption also grew by 6.3 percent. The Filipino households spent mostly on food and non-alcoholic beverages, miscellaneous goods and services, transport, restaurants and hotels and communication. “Strong domestic demand fueled output growth, led by significant improvements in government spending and household consumption,” he said.
The forecast for the fourth quarter, according to Balisacan, is progressive. It is expected that domestic demand will continue the growth trajectory to peak because of the holidays. “This, along with low inflation, low oil prices and the anticipated effects of election spending on the country’s growth, supports this outlook. Moreover, the services sector will remain strong and investments are likely to go up due to expected increase in disbursements,” he said.
Despite all these positive feedbacks on the economy, there are also risks that may impede economic growth. Balisacan said that achieving 6 percent for the whole of 2015 remains a challenge due to—
- El Niño effect that continues to adversely impact the economy, particularly affecting the agriculture industry, for which the government has to take necessary measures on food security and potable water supply.
- 2016 elections that poses uncertainties in light of political leadership changes that will take place, which could change the focus of the economic path for the country.
But next year’s election would have both negative and positive effects on the economy to progress. On the positive side, candidates will boost private consumption during campaigns while a change in leadership may put investors on hold.