Asia Regional Integration Center

Growth in domestic investment helped the economy to grow by 6.3% in the first half of 2018, easing from 6.6% in the same period of last year on lower export growth and private consumption and, after last year’s rebound, a plateauing of agriculture. Domestic investment rose by 16.4% in the first half of the year on brisk construction and a 17.1% expansion in outlays for industrial machinery and equipment. Household consumption, comprising two-thirds of GDP, rose by 5.7% in the first half of 2018, a bit lower than the 5.9% rise a year earlier. Unexpectedly higher inflation softened demand, even as support from remittances continued. By sector, continued strength in industry and services partly mitigated stagnation in agricultural output.

GDP growth forecasts are revised down from 6.8% to 6.4% for 2018 and from 6.9% to 6.7% for 2019. While growth from agriculture and allied activities is likely to be only barely positive this year, industry and services look set to maintain solid growth trajectories. Private consumption should continue to grow briskly in the near term on continued growth in remittances from overseas Filipinos, solid job creation including those under the public infrastructure program, and a resulting decline in unemployment.