THE FACT that our gross domestic product grew 6.1 percent in the third quarter of 2018, despite the many challenges in the global economy, is something that we should cherish as a nation.
While this is slower than the 7.2 percent growth registered in the second quarter of 2017, the most recent GDP figure points to a sustained expansion of the Philippine economy that will eventually translate into a better quality of life for most Filipinos.
Data from the Philippine Statistics Authority show that if not for the 0.4-percent contraction in the agriculture output in the third quarter, the economy would have grown closer to the government’s original target of seven percent to eight percent.
Still, the third-quarter expansion gives us a lot of reasons to be hopeful. The gross national income, which is formerly called the gross national product, expanded 6 percent. The services sector, which now dominates the Philippine economy, grew 6.9 percent, while the industrial sector gained 6.2 percent.
The economic growth in the first three quarters of 2018 averaged 6.3 percent, near the interagency Development Budget Coordination Committee’s revised target range of 6.5 percent to 6.9 percent for the year.
The National Economic and Development Authority said that the Philippines remains one of the fastest-growing economies in Asia, next to Vietnam at 7 percent and China at 6.5 percent. I know that we used to have the fastest growth in the region, but obtaining a bronze medal on the economic stage is not bad at all.
In fact, it should be a cause for celebration. Our economy used to grow by less than four percent in the 1980s and 1990s, and there were even times that it contracted year-on-year. Our GDP shrank 7.3 percent in 1984 and 1985, 0.6 percent in 1996, and another 0.6 percent in 1998 at the height of the Asian financial crisis, data from the World Bank show.
Our fastest growth over the past decade was 7.6 percent in 2010 and 7.1 percent in 2013. Last year, we grew 6.7 percent, becoming one of the best performing economies among emerging markets.
So our most recent expansion of 6.1 percent in the third quarter is not only acceptable but also something that deserves praise, especially as the United States adopted a more protectionist policy that is shaking the global economy.
It is also a time to become more realistic and adjust our growth expectations, as we navigate our way through the global crisis brought about by the trade war between the US and China, the realignment of the European Union with the exit of the United Kingdom, higher global oil prices and the normalization of monetary policy in many countries.
Budget Secretary Benjamin Diokno, a top economist, said “the Philippines remains to be one of the fastest growing economies in the fastest growing region, that is the Asean region, in the world.”
Diokno says our country’s macroeconomic indicators “demonstrate that in spite of global and domestic challenges that the Philippine economy faces, the bigger picture suggests a solid, robust and resilient economy.”
I share his enthusiasm that as economic growth continues, the Philippines will become an upper-middle income country soon, which means our people will have more purchasing power and enjoy a better quality of life.
For the moment, we just need to manage our expectation, relax and enjoy our recent economic feat.
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This piece first came out in Business Mirror on Nov. 20, 2018 under the column “The Entrepreneur.” For comments/feedback e-mail to: mbv.secretariat@gmail.com or visitwww.mannyvillar.com.ph./PN
