The Philippine economy continues to soar.
The Philippine economy posted a record growth of 7.8 percent in the first quarter of this year. It is much higher than the growth of 6.5 percent recorded in the first quarter of 2012 and the growth of 5.1-6.4 percent forecast by economists.
With its 7.8 percent growth, the Philippines is now the fastest-growing economy among East and Southeast Asian countries. It is ahead of China which recorded growth of 7.7 percent; Indonesia, 6 percent; Thailand, 5.3 percent; and Vietnam, 4.9 percent.
The National Statistical Coordination Board reported that services expanded by 7 percent, industry by 10.9 percent, and agriculture by 3.3 percent. “The impressive performance of these three sectors proves that the country is now reaping the benefits of the strengthened priority sectors that are potential growth drivers and employment generators,” Socioeconomic Planning Secretary Arsenio Balisacan said.
High domestic demand caused the manufacturing sector to grow by 9.7 percent. Also stirring the economy is the construction sector that grew 32.5 percent in the first quarter.
Retail trade remained strong as the spending capacity of Filipinos continued to grow due to the improving employment situation, higher overseas Filipinos workers’ remittances and stable inflation.
Despite the glowing data, however, some sectors are apprehensive over the sustainability of the high growth rate, noting the weakening of the peso and the fall of the Philippine stock exchange index (PSEI).
PSEI dropped in the last week of May below 7,000 points at 6,953.35 with the major sectors on the red, while the peso-dollar exchange rate plunged to P42.376, down by almost 10 centavos from the previous rate of P42.279.
But the Aquino administration asserted that the robust growth is a reflection of high investors’ confidence, and this has come as a result of the campaign against corruption and better fiscal management.
This observation was echoed by AIA Group, which is said to be the largest Pan-Asian life insurance group. AIA said the strong growth is sustainable because it remains under leverage that enables the economy to have more capacity for further growth.
John Chu, AIA chief investment officer, said, “The Philippines is now on a very positive investment cycle, and growth will be sustained for a long period.”
From our standpoint, we see the robust growth of the economy as a result of the determined efforts of the Aquino administration to rid the government of corrupt officials and employees.
Although the President’s “matuwid na daan” (straight path) campaign has barely scratched the surface of entrenched corruption, Aquino has succeeded in delivering the message that corrupt people have no place in good government.
To sustain the high economic growth, Aquino should be relentless in his anti-graft drive.
Good governance is the key to progress and prosperity.