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Economic growth meets forecasts; gov't flags inflation 'spoiler'

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ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2018/news/05/10/20180221-unimart-supermarket-opening-8083-md-47.jpg"/><figcaption><em>Mark Demayo, ABS-CBN News/File Photo</em></figcaption></figure></div><p>MANILA - The economy grew 6.8 percent in the first 3 months of the year, meeting analysts&#x27; expectations, but at the same time reflecting faster inflation that slowed consumer spending.</p><p>Without the effects of inflation, real gross domestic product growth in the first quarter would have fallen &quot;well within&quot; the full-year goal of 7 to 8 percent, Socioeconomic Planning Secretary Ernesto Pernia said.</p><p>&quot;Inflation is the spoiler. That is why we need to really focus on inflation, especially because it is the number one concern expressed by Filipinos in surveys,&quot; Pernia told reporters.</p><p>The government needs to &quot;address sources of rising inflation&quot; even as the uptick in prices will &quot;gradually ease this year,&quot; Pernia said. Mitigating measures such as unconditional cash transfers to the poor should be hastened, he said.</p><p>The Bangko Sentral ng Pilipinas is expected to raise the benchmark borrowing rate by 25 basis points later Thursday after inflation in April reached 4.5 percent, the highest in over 5 years.</p><ul class="op-related-articles">	<li><a href="http://news.abs-cbn.com/business/05/10/18/maxs-q1-net-income-falls-30-pct-on-raw-material-manpower-costs">Espenilla on rate hike: Inflation data needs &#x27;hard look&#x27;</a></li>	<li><a href="http://news.abs-cbn.com/business/05/04/18/pressure-mounts-on-bsp-to-raise-rates-as-inflation-nears-peak">Pressure mounts on BSP to raise rates as inflation nears peak</a></li>	<li><a href="http://news.abs-cbn.com/business/05/10/18/maxs-q1-net-income-falls-30-pct-on-raw-material-manpower-costs">Espenilla on rate hike: Inflation data needs &#x27;hard look&#x27;</a></li></ul><p>It was the tenth consecutive quarter that the Philippines posted growth of at least 6.5 percent, Pernia said.</p><p>The country also matched the 6.8-percent expansion in China, exceeded Indonesia&#x27;s 5.1 percent but was behind Vietnam&#x27;s 7.4 percent, he said.</p><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2018/trending/05/10/gdp-growth-rate.jpg"/></figure></div><ul class="op-related-articles">	<li><a href="http://news.abs-cbn.com/video/business/04/12/18/adb-says-ph-entering-golden-age-of-economic-growth">ADB says PH entering &#x27;golden age of economic growth&#x27;</a></li>	<li><a href="http://news.abs-cbn.com/business/04/17/18/chinese-economy-grows-slightly-above-forecasts-in-q1">Chinese economy grows slightly above forecasts in Q1</a></li></ul><p>Pernia said higher consumer prices due to tax reform would be &quot;transitory&quot; and spending would recover within the year.</p><p>The first package of tax reform slashed personal income tax rates, increasing the take-home pay of the middle class. However, duties were also raised on fuel, sugar-sweetened drinks and cars.</p><p>Industry grew 7.9 percent, backed up by manufacturing and construction. &quot;This indicates that our &#x27;Build, Build, Build&#x27; program is gaining ground,&quot; Pernia said.</p><p>President Rodrigo Duterte plans to build up P8 trillion in new infrastructure to accelerate economic growth.</p><p>&quot;This performance demonstrates that we have formally laid the groundwork for reforms in some of the sectors of the economy,&quot; Pernia said.</p><ul class="op-related-articles">	<li><a href="http://news.abs-cbn.com/focus/multimedia/infographic/04/07/18/mega-manila-subway-underway-with-build-build-build">Mega Manila Subway underway with &#x27;Build, Build, Build&#x27;</a></li>	<li><a href="http://news.abs-cbn.com/business/05/02/18/build-build-build-can-help-reduce-poverty-adb">&#x27;Build, Build, Build&#x27; can help reduce poverty: ADB</a></li></ul><div><strong>GROWTH DRIVERS</strong></div><p>The services sector was the main growth driver in the first quarter, contributing 4 points to the over-all growth rate. The sector grew 7 percent during the period, according to ABS-CBN Data Analytics.</p><p>Industry grew at the fastest clip, 7.9 percent, boosted by construction and manufacturing, which expanded by 9.3 percent and 8 percent, respectively.</p><p>Growth in agriculture slowed compared to last year. The sector had grown for five consecutive quarters.</p><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2018/trending/05/10/supply-side-contribution-to-gdp.jpg"/></figure></div><p>Household consumption and investment were the principal drivers of growth on the demand side, each contributing 3.9 percentage points.</p><p>Consumption growth slowed while the 12.5-percent expansion in investment was the fastest in more than a year.</p><p>Government expenditure accelerated for the fourth straight quarter, expanding by 13.6 percent.</p><p>Growth in exports was the slowest since the second quarter of 2015, while the uptick in imports was the slowest since the third quarter of 2014.</p><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2018/trending/05/10/demand-side-contribution-to-gdp.jpg"/></figure></div><div><strong>-- with a report from ABS-CBN Data Analytics</strong></div>

<p>The economy grew 6.8 percent in the first 3 months of the year, meeting analysts' expectations, but at the same time reflecting faster inflation that slowed consumer spending.</p>

The economy grew 6.8 percent in the first 3 months of the year, meeting analysts' expectations, but at the same time reflecting faster inflation that slowed consumer spending.