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6.9% GDP growth – a great legacy

THIS may well be the most significant legacy of the outgoing Aquino administration – a Gross Domestic Product (GDP) growth of 6.9 percent for the first quarter of 2016. It was better than China’s 6.7 percent, Vietnam’s 5.5 percent, Indonesia’s 4.9 percent, and Malaysia’s 4.2 percent. The Philippines was thus the fastest growing economy in Asia in these first three months of the year.

The growth was driven by gains in industry, 8.7 percent, and services, 7.9 percent – boosted, no doubt, by the election campaign. Previous gains had been led by the services sector – tourism, business process outsourcing, banks, etc. – but this time, industry was the leading contributor to the growth, notably, manufacturing, construction, and utilities. These two sectors more than made up for a 4.4 percent drop in the agricultural sector, blamed on the El Niño drought.

With the strong first-quarter growth, the National Economic and Development Authority (NEDA) said, the national economy is on track to meet the growth target of 6.8 to 7.8 percent for the whole year of 2016. The Aquino administration thus passes the ball to the Duterte administration.

NEDA Director-General Emmanuel F. Esguerra said the Philippines was left behind by its Asian neighbors in the first wave of foreign investments in the 1980s due to perceived political instability. We may remember this as the period of the EDSA People Power Revolution followed by the restoration of our democratic institutions. The country must not miss the current second wave of foreign investments, Esguerra said. It must demonstrate that its institutions are mature enough to withstand political transitions.

We are now going through a great political transition with the election of a new president who appears to be setting out in new directions. There are fears about the means he will use to achieve his goal of ending crime and the drug problem in only three to six months. Religious and allied groups are concerned about his push for the restoration of the death penalty. Some conservative elements wonder about President-elect Duterte’s invitation to the Communist Party of the Philippines to join his cabinet.

We are indeed in the middle of a transition period with more than its share of questions, but the pervading spirit is still that of hope and unity as the new Duterte administration takes over the government. And it has the great advantage of beginning with a 6.9 percent GDP growth, a great legacy from the outgoing administration.