Philippines' Q2 GDP grows 2.6 pts lower than Diokno’s 10% expectation

·2 min read
Philippines' Finance Secretary Benjamin Diokno attends an economic briefing following President Ferdinand Marcos Jr's first State of the Nation Address, in Pasay City, Metro Manila, Philippines, July 26, 2022. REUTERS/Lisa Marie David
Philippines' Finance Secretary Benjamin Diokno attends an economic briefing following President Ferdinand Marcos Jr's first State of the Nation Address, in Pasay City, Metro Manila, Philippines, July 26, 2022. REUTERS/Lisa Marie David

The Philippines' economic output grew slower than expected at 7.4 percent – lower than Department of Finance Secretary Benjamin Diokno’s at least 10 percent projection for the second quarter of 2022.

Last July, Diokno mentioned how he was optimistic with the second quarter since it did not undergo a surge of COVID-19 cases unlike the previous quarter.

This announcement came on Tuesday (August 9), days after the Philippines recorded a 6.4 percent inflation rate for July – the highest in nearly four years.

Industry groups that primarily contributed to this quarter’s gross domestic product (GDP) were transportation and storage (27.1%), construction (19.0%), wholesale and retail trade (9.7%), and repair of motor vehicles and motorcycles (9.7%).

All economic subsectors experienced growth, with services expanding by 9.1 percent, industry by 6.3 percent, and agriculture, forestry, and fishing (AFF) by 0.2 percent.

National income also increased by 9.3 percent, associated with the 64.8 percent growth in Net Factor Income from Abroad (NFIA).

Diokno said in June 6 that the administration of Ferdinand Marcos Jr. has set “more ambitious targets” for the Philippine economy in contrast to the previous term of Rodrigo Duterte.

“We want to show the world that we’re conscious of having sound fiscal management,” Diokno mentioned.

“If I remember right, it started at around 25% during Duterte’s first year in office…. But our target under this framework is that [the] poverty rate will be down to 9 percent by 2028,” he said. “Mas ambisyoso kami eh…kasi maraming bagong reporma eh (We are more ambitious because there are more reforms).”

Despite this ambitious remark, however, they project that this year’s Gross Domestic Product (GDP) will be at a mere 6.5-7.5 percent this year – lower than the Duterte admin’s forecast of 7-8 percent.

Mark Ernest Famatigan is a news writer who focuses on Philippine politics. He is an advocate for press freedom and regularly follows developments in the Philippine economy. The views expressed are his own.

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