MANILA, Philippines – Exceeding expectations, the Philippines posted its highest gross domestic product (GDP) growth since the last quarter of 2014, as it welcomed the year with a 6.9% growth.
This makes the country the fastest growing economy among its selected ASEAN (Association of Southeast Asian) neighbors, followed by China, Vietnam, Indonesia, and Malaysia, the National Economic and Development Authority (NEDA) reported on Thursday, May 19.
Relative to other Asian economies that have already released their first quarter 2016 GDP growth data, the Philippines is now the fastest growing economy, followed by China (6.7%) and Vietnam (5.5%), Presidential spokesperson Edwin Lacierda said in a statement.
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“We’re pleased to be turning over a strong and stable economy onto the next administration. We underscore the need for policy consistency and for sustained business confidence,” acting NEDA Director-General Emmanuel F. Esguerra said in a press conference, as tweeted on the agency’s Twitter account.
The industry and services sector drove the economy’s growth to outstanding levels, contributing 8.7% and 7.9% respectively, more than 2% improvement over the same period last year.
However, the agricultural sector continued to perform poorly, contracting to 4.4%. The El Niño phenomenon contributed to the consistent poor performance of the industry. Nonetheless, food prices remain unchanged due to “good management of food stock.”
Esguerra noted that the agriculture and fisheries sector will continue to reel from the impact of El Niño, “but we must start preparing for La Niña. It will be up to the incoming administration to flesh out details of La Niña preparedness plan,” Esguerra added.
On the demand side, construction grew faster at 12%, while public and private construction posted significant improvement at 39% and 7.1%, respectively.
However, the volatile condition of the world market has already caught up to the economy with the slower growth of exports at 6.6%. Despite such, strong domestic demand is expected to offset the weak conditions.
Overall, Esguerra said the economy is on track to meet its full-year GDP target of 6.8 to 7.8% for 2016 as businesses’ confidence has been “encouraging.”
While election spending has been historically proven to contribute in the economy’s GDP, its impact is yet to be quantified in the first quarter report and will most likely bear fruit in the following quarters.
“The economic performance of our country from 2010 to the first quarter of 2016 remains the highest growth average recorded by the country that is backed by sound macroeconomic fundamentals,” Esguerra added.
From 2010 to 2015, the economy’s GDP average is at 6.3%, posting its highest growth in the first quarter of 2013 at 7.7%.
“We’re hopeful that the economic agenda of the incoming administration will continue and build on the gains of the last five years,” Esguerra said.
Esguerra said in a statement that the country should not miss the current second wave of foreign investments into the region, especially that the country has finally become an investment destination of choice,
“It must be noted that part of the reason the Philippines was left behind economically by its neighbors is that the Philippines was largely ignored by the first wave of foreign investments into the region during the mid-1980s due to political instability,” he noted.
Thus, it is important to demonstrate that the country’s democratic institutions are mature enough to withstand political transitions.
“That the country was able to hold a generally peaceful and credible elections — aided by active citizen engagement and leading to wide public acceptance of the results — is a strong indication of much improved democratic institutions,” he said.
“Also, agreeing on a long-term vision for the country would help ensure that policy decisions are coherent, consistent, and on the right track toward realizing people’s aspirations even as political leaders change. We hope that our country will continue and improve the gains of the economy in the years to come,” he said.
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Lacierda added that President Benigno Aquino III has often articulated this administration’s guiding principle: "to leave the country in a far better state than when he first found it."
"With our peers in the international community having acknowledged our progress, it is now up to the next administration to build on the gains we have recently achieved—so that they may further redound to our nation’s improvement, for the benefit of generations to come," said Lacierda.
Elyssa Christine Lopez is Entrepreneur.com.ph's editorial assistant/ staff writer. Follow her on Twitter@elyssalopz.