Earlier today, government authorities bared that the Philippine economy grew by a robust rate of 6.8% in the first quarter of Fiscal Year 2018. This growth rate makes the Philippines one of the best performing economies in the region and is close to the lower end of the government’s target of 7% to 8%.

         “We are pleased to announce that economic expansion for the first quarter of 2018 hit 6.8%, making the Philippines one of the fastest-growing economies in the fastest-growing region in the world,” said Budget and Management Secretary Benjamin E. Diokno. “Increased government spending has translated to a strong showing for the Philippine economy in Q1,” he added.

         According to the Philippine Statistics Authority, Government Final Consumption Expenditure (GFCE) grew by 13.6% in Q1 2018, a marked improvement from the 0.1% growth in the same period of 2017. GFCE measures government spending on goods and services, and is one of the components in accounting for the total output in the economy.

         “The Duterte Administration’s audacious Build Build Build Program definitely contributed to higher government spending for Q1, and this is corroborated by our data on National Government Disbursements,” said the Budget Chief. For the first three months of the year, Infrastructure and Other Capital Outlays surged by 33.7% year-on-year, reaching P157.1 billion. In fact, actual infrastructure disbursements exceeded the program by P13.7 billion, or 9.6%, in the first quarter of 2018.

         The Gross Value-Added in Public Construction also showed optimistic results as it grew by 25.1% in the first quarter of the year. This is a marked improvement from the 2.1% growth recorded in the same period of 2017. Gross Value-Added is a metric that estimates the value of goods and services in a particular sector after deducting the cost of inputs and raw materials used in production.

“I am optimistic that growth in the coming quarters will accelerate to at least the low end of our target, especially with a perceived recovery in the agricultural sector and higher consumer spending,” said the Budget Secretary.

Agriculture expanded at a sluggish rate of 1.5% in the first quarter of 2018, which softened overall economic expansion. The sector has the potential of growing between 2.5% to 3.5%

“Consumption should improve as workers begin to digest the stimulative effect of the tax cuts, amounting to about P138 billion in 2018, as well as the unconditional cash transfers for the mitigating measures, worth P24 billion this year,” he added.

         “Moving forward, expect government spending to continue to boost our growth prospects given the staggering P3.767 trillion National Budget for 2018,” said Secretary Diokno. “With the Q1 numbers, I am confident that 7% to 8% growth is doable and our fiscal reforms will only aid us in our objectives,” Secretary Diokno concluded.

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ANNEX

Growth Rates

At 2000 Constant Prices