HOUSE Ways and Means Chair Joey Sarte Sakceda (Albay, 2nd district) released the following statement on the Q2 GDP figures:
The global environment remains very hostile to growth. Interest rates remain high and are nowhere near adjustment as cost of living remains unfavorable. And yet, the economy under President Marcos remains robust and, to some extent, immune from global conditions.
Beyond the headline number, what is notable is the sources of growth: on the supply side, construction grew the fastest at 16.0 percent. On the demand side, gross capital formation grew at a remarkable 11.5 percent. The shorthand for that is simple: investment. The private sector sees the continued growth potential of the Philippines and is locking in.
Part of that, I attribute to the enactment of the Public-Private Partnership Code, which has stimulated investment in infrastructure especially at the local sector. The aggregates are yet to come in, but there is anecdotal evidence to suggest PPPs in the local sector have been unleashed by clearer, simpler rules on procurement and bidding.
One source of concern is the decline in agriculture. Severe weather seems to have affected the Agriculture, forestry, and fishing sector, which posted a year-on-year decline of 2.3 percent. That is despite price increases in corn and poultry – which should have increased gross value-added. In other words, volumes of output seem to have suffered as a result of both El Nino and heavy rains.
On the creatives sector: There is a surprising amount of manufacturing growth related to the creatives sector. The sector that recorded the highest growth in manufacturing is printing and reproduction of recorded media at an eye-popping 43 percent. Manufacture of furniture also recorded a 26.2 percent growth – considerable by any standard. I believe in the future of this sector, that is why I fought hard, as Chairman of the House panel, to keep the earmarking of 5 percent of revenues from the upcoming VAT on foreign digital services towards the creatives sector.
It is often mistakenly said that the creatives sector will improve the services sector primarily. There are downstream industries in manufacturing that are inextricably linked to the creatives sector.
I emphasize the need to boost this sector because global experience shows how well it can insulate an economy from global shocks. In both the 1997, 2008, and 2020 global economic slowdowns, Korea relied heavily on the creatives sector to boost its exports. Any economy with the cultural predisposition of the Philippines – tech-savvy, English-speaking, artistic – has a future in global creatives. We need to capitalize heavily on it.
I am optimistic we will meet growth targets this year: although I strongly urge the government to continue to expedite spending and approvals for PPP projects. Overall, the prospects remain strong and positive despite global challenges.
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