The year having moved into its last third, government policymakers and private-sector economic analysts have begun the process of predicting the 2017 GDP (gross domestic product) growth that will most closely approximate the Philippine economy’s eventual full-year performance. Economic forecasting being one of the riskiest activities known to man, they will be proceeding with utmost caution.
The benchmarks again which the government and private-sector analysts will choose for their forecasting chore will be Philippine economy’s performance during the last two years. The economy grew by 6.9 percent in 2016, by 6.45 percent during the first quarter of 2017 and by 6.45 percent during this year’s first semester.
The analysts/forecasters will of necessity have to take into account the government’s 2017 growth-rate target, which is 6.5 percent to 7.5 percent. This is unchanged from that for 2016. The average annual GDP growth rate of the Benigno Aquino III years (2010-2016) was 6.1 percent.
Following the exuberance generated by the last two years o the Aquino administration, a tempering of expectations about Philippine economic growth has been noted in recent months. Whereas most of the 2017 GDP growth forecasts used to be in the close-to-7-percent area, a member of major institutional prognostications have undergone adjustment down to the vicinity of 6.3-6.5 percent. These include international institutions and governments.
One of the institutions that of late have adopted a more cautious approach to the 2017 prospects of the administration of President Rodrigo Duterte in Global Source, whose analytical issuances are co-written by former Undersecretary of Finance Romeo L. Bernardo.
In the view of Global Source, the Philippine economy will probably grow by 6.5 percent this year and slow down to 6.3 percent GDP growth in 2018. Like all economic forecasts, Global Source’s 6.5 percent forecast is the net outcome of the interplay of positive factors and negative factors affecting the management of the Philippine economy by the Duterte administration.
True, there are positive things going for the Duterte-governed economy, the latest Global Source analytical issuance says. It speaks of “the appointment of a solid economic team, continuity in the projects started by the previous administration (and) appointments in the Bangko Sentral ng Pilipinas,” among other things. The tax reform program and “ambitious” infrastructure program which it also speaks of are still very much works-in-progress. It “expected a greater contribution from exports in 2017.”
But the negative factors clearly appear to have weighed more heavily onr. Bernardo and his colleagues in their latest issuance on the Philippine economy’s performance in full-year 2017.
They spoke of “increased policy unpredictability, the President’s irreverent attitude and outsider image.” Bad decisions had been made, they said. These included “the appointment of Leftists to the Cabinet, the flip-flopping on rice importations, the unaffordable increase in (SSS) pension, the provision of free irrigation and the enactment of free education in public tertiary schools.”
Did these negative factors give rise to a “weaker BOP (balance of payment) current account” and “slower growth in consumer demand?” Mr. Bernardo and his colleagues appear to discern a connection. 6.5 percent growth for the Philippine GDP this year? That clearly is the number around which most forecasts of the Philippine economy’s 2017 performance have begun to gravitate.
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