APD | Philippines: Finance Department says household consumption still robust during the first six months

By APD writer Melo M. Acuña

MANILA, Aug. 27 (APD) – The Department of Finance said while the economy slowed to 5.5% during the first six months of the year, household consumption remained robust, “equaling last year’s first-half growth at 5.8%” as consumer prices have gone down after quick response by the President on the streamlining of food supplies.

In a statement released before midday today, the DOF said the slowed growth was due to the delayed passage of the 2019 budget. The performance is lower than the 6.3% growth posted last year.

All other expenditure components declined from government consumption from a high of 12.6% to 7.1%, capital formation from 14.9% to -0.1% and exports from 12.6% to 5.0% due to trade tensions that shook international value chains and dampened global investment.

However, private construction and services maintained robust growth that provided hints of a quick recovery in the future.

Private construction moved from 6.5% to 23.1% growth which cautioned the decline in public construction. Private construction, according to the DOF, contributed 1.1 percentage point to the 5.5% growth in the first semester, tempering the negative contribution of public construction of minus 0.7 percentage point.

“Had the growth in public construction been at most zero, GDP growth could have reached 6%,” the DOF statement said. Services rose from 6.7%, with the financial sector paving the way from 7.7% to 9.7%.

Agriculture has remained laggard, with its 0.7% semestral growth.

The fiscal sector remains strong and can support higher growth as the National Government (NG) revenues rose by 0.4% of GDP mostly sourced from tax revenues.

(ASIA PACIFIC DAILY)