The National and Economic Development Authority (NEDA) said that the Philippines is becoming more of an “investment-led and industrialized” economy, shifting from being consumer-centric to more of a producing and manufacturing economy.
NEDA Director General and Socioeconomic Planning Secretary Arsenio Balisacan said that the country is “in the process of rebalancing” where the economy is adjusting from being services and consumption-driven economy to manufacturing and industrialization that will provide people “higher quality jobs.”
“For the past three quarters, capital formation has been growing more rapidly than household consumption and the growth of industry has so far outpaced that of the services sector,” Balisacan said, referring to the increasing investments and capital put into the country that will eventually yield to more jobs and infrastructures.
“Notable are the double-digit growth rates in fixed capital and the manufacturing subsector in the last quarter,” he added.
According to the National Statistical Coordination Board economic data for the second quarter of the year, consumer spending slowed down by 5.2 percent from the 6.6 percent same time last year.
On the other hand, investments in different sectors generally went up—with investments in capital formation rising by 9.7 percent from its 8.7 percent growth last year.
Construction investments also took its fifth consecutive quarterly ascent, posting 15.6-percent growth in the second quarter of the year from the 10.2 percent same time last year.
Balisacan said that investments would further “take lead” in the medium term, in reference to the stable improvement for the past few quarters.
In overall gross domestic product growth of 7.5 percent, the Philippines is still the “fastest-growing economy” in all of its Southeast and East Asian neighbors.
Balisacan noted that the country still achieved the highest growth despite global economic slowdown, less household and consumer expenditure and decreased exports.
“Note that we are able to grow at a fast pace despite the contraction in exports. This internal dynamism indicates greater consumer and business confidence in the domestic economy, as we have continued to keep our macroeconomic fundamentals in check,” Balisacan said.