Better than Expected!
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By Rick Daligdig
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The first quarter Gross Domestic Product printed at 6.4%. It is better than most the economic analyst expected. Although it was the slowest in two years, our GDP is one of the fastest growing in the Southeast Asian Region. The Philippines is ahead of Indonesia (5%), China (4.5%), and Vietnam (3.3%).
National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said that while first-quarter growth was slower year on year, it should not be interpreted as a slowdown.
“Rather, the economy is normalizing its previous trend. The better-than-expected first-quarter performance this year implies that we are returning to our high-growth trajectory despite the various challenges and headwinds we have faced,” he said at the same briefing. Household spending is the main driver of our GDP even though it was slow down to 6.3% than the 7% growth in the last quarter. We cannot discount that the slowdown was caused by the all-time high inflation that dumped the purchasing power of the people.
Gross national income — the sum of the nation’s GDP and net income received from overseas — rose by 9.9%, slightly lower than the 10.5% a year ago, but higher than the 9.3% in the fourth quarter. National Economic Development Authority (NEDA) Sec. Balisacan said that the government is on track to achieve the full-year GDP target of around 6-7% for 2023. However, he flagged several risks to the growth outlook including the looming El Nino phenomenon.
Agriculture Has a Promising Start.
In a surprising feat, the agriculture sector posted an expansion after several flat to contraction outputs. The sector grew by 2.1% in the first 3 months of 2023. This was a turnaround from the 0.3% decline in the first quarter of 2022 and the 1% contraction in the fourth quarter of 2022.
Agriculture usually contributes around a tenth to the Philippines’ overall gross domestic product (GDP). Broken down, Crops, which made up 57.8% of the total farm output, expanded by 1.7%, reversing the 1.7% decline in the same quarter last year, and the 1% dip in the fourth quarter. Palay was increased at 5.2% and 3.2% for corn. The Department of Agriculture (DA) is targeting 2.5% farm output growth this year. But El Nino may hamper its momentum as it will decrease the rainfall and make the land dry in most agricultural parts of the country. The government created a task force to mitigate and manage the effect of climate disturbance.
Inflation Steadily Cools Down.
Meanwhile, the Inflation, which causes a headache to the government up to simple citizens has steadily been on a downward trajectory. April’s inflation dropped at 6.6% from 7.6% in the previous month. Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said the month-on-month inflation trends “present an even stronger argument” for keeping interest rates unchanged at the central bank’s meeting on May 18.
“The recent decline in inflation provides the BSP some flexibility for monetary policy, even as it remains vigilant against potential risks to the inflation outlook,” the BSP said in a statement.
FDI leaps up! Highest in 14 Months
Foreign Direct Investment (FDI) improves amid the positive sentiments from the investors in the country. FDI net inflows rose by 13% in February. Data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed that FDI net inflows climbed to $1.05 billion in February from $926 million in the same month in 2022. This was also the highest level in 14 months or since the $2.66-billion net inflows in December 2021. The positive sentiment of the investors in our country is one of the results of the foreign trips of the President to introduce and invite investors to invest and do business in our country.
BSP Governor Felipe M. Medalla said there is strong interest in the Philippines from foreign investors.
“[But] whether when it will be actually translated to actual foreign direct investments will depend on many things,” he said in an interview with The Banker on the sidelines of the Asian Development Bank (ADB) annual meetings in Seoul, South Korea.
Still, Mr. Medalla said there is optimism that the current administration’s policies and recent economic reforms will help attract more foreign investments.
These are some good news that will make us believe that there are still positive and good things that will happen in our country. We, Filipinos are good at taking the bright side of every happenings in our lives. We must say that we can still get better than expected.
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