The Philippines’ economy grew a better-than-expected 6.9 percent in the first quarter, the government said Thursday, putting it on track to meet full year targets and making it one of Asia’s best performers for the three month period.
The GDP figure beat economist forecasts of about 6.6 percent, and marks the highest quarterly growth in the Philippines since the end of 2014.
It was achieved despite a drought-ravaged farm sector and relatively weak exports, and also coincided with months of campaign spending for May 9 presidential elections, Economic Planning Secretary Emmanuel Esguerra said.
The economy expanded by 5.2 percent in the same period last year.
“We are pleased to be turning over a strong and stable economy to the next administration,” Esguerra told a news conference, referring to president-elect Rodrigo Duterte who takes office on June 30.
“Barring a significant drop in business confidence in the second half, the economy seems to be on track in meeting the full-year target of 6.8 to 7.8 percent.”
It puts the economic expansion during outgoing President Benigno Aquino’s six-year term at just over six percent, the highest on record for the country, Esguerra said.
President-elect Duterte has vowed to broadly pursue Aquino’s main economic policies, but his vague plans have left analysts uncertain about his agenda.
The firebrand politician, who is due to be sworn into office on June 30, stormed to victory in national elections this month after an incendiary campaign dominated by his profanity-laced vows to kill criminals.
The government said economic growth at the start of the year was investment-driven, particularly in the construction and manufacturing sectors, as exports rose only modestly due to weak demand.
The investments led to an 8.7 percent growth in the industrial sector, the highest in the last five quarters.
Esguerra said strong domestic demand would push growth in the near term, offsetting the weak global environment.
However, the ministry said the Philippine farm sector shrank by 4.4 percent after near stagnation over the past year, as the worst El Nino dry spell in 28 years ravaged rural areas.
The sector employs 27 percent of the Filipino labour force.
Farmers also comprise a large chunk of the 26 percent of Filipinos who live on $1.30 a day or less.
Esguerra called for added state spending to diversify crops, boost community defences against disasters that also include typhoons and floods, and social protection including crop insurance.