Philippines expects 7% GDP growth rate in Q2 despite Marawi crisis

The Duterte administration is targeting up to 7.5% GDP growth rate this year and 7-8% from 2018-2022.

Picture for representation
Picture for representation Reuters

Despite the on-going armed conflict in the Southern Philippines, Economic Minister Ernesto Pernia told journalists that by looking at some indicators, the country is expecting a 7% growth rate in the Gross Domestic Product (GDP) at the end of the second quarter, which is higher than the first quarter growth rate of 6.4%.

Budget Minister Pablo Diokno also affirmed Pernia's forecast because in May 2017 government project spending grew by 20%. For instance the completion of 38-kilometer North-South Commuter Railway connecting Tutuban and Malolos that is epected to greatly contribute to the economy and thus, Diokno encouraged other cabinet ministers to speed up spending to stimulate the country's economy.

Diokno also said that to sustain the growing economy of the Philippines, they will propose a P3.7 trillion budget in 2018 and they will also lower their spending targets.

The Duterte administration is targeting up to 7.5% GDP growth rate this year and 7-8% from 2018-2022. The government is also looking at exports as significant contributor to the Philippine economy where it sees a 9% annual expansion from 2020 to 2022.

The Philippines remains to be one of the fastest growing GDP growth rates in Asia despite a quarter of the population remaining below the poverty threshold income.

The Philippines also suffered economic setbacks earlier, especially when it launched a massive anti-drug war campaign that caught a short period of jittery in the Philippine market.

However, despite the ongoing campaign against drug users and traders, the economy bounced back that allowed more foreign investors to invest in the country.

Around 7,000 illegal drug users and traders have been reportedly killed through either legitimate police operations or through extra judicial methods committed by still unknown vigilantes, riding in tandem motorcycles.

Critics of Duterte accuse him for the killing as they belive that he has full knowledge of the on-going judicial killing of illegal drug suspects. Duterte along with 11 other government officials are facing criminal charges at the International Criminal Court for their alleged involvement in the Davao Death Squad (DDS). However, the president said that the Philippines is a safe place to invest when there are no drug addicts.