Philippine economy expands by 6.9% in Q3, beating forecasts

Philippine GDP Growth Improves In Q3

Despite the adjustment, the growth in gross national income, formerly known as gross national product, was maintained at 6.8 percent.

The GDP growth accelerated to 6.9 percent in the September quarter after the upward revision in the second quarter.

"So imagine if both public and private spending are on a roll".

Pernia is optimistic that fourth-quarter GDP will likely be higher or match the third-quarter economic performance.

Industry in the Philippines continued to be on an upward path, rising 7.5 percent from 7.4 percent in the second quarter, offsetting the deceleration in agricultural growth.

"Going forward, we expect growth in investment and private consumption to remain at around 9 percent and 5.5 percent respectively, once the high base effects from last year's elections dissipate from fourth quarter onwards", they said.

The Philippines is emerging as one of this decade's economic stars with the World Bank predicting growth of more than 6 per cent until 2019, underpinned by an ambitious infrastructure building programme and a young and growing population.

"We are now seeing a sustained improvement in government spending in a run-up to our massive infrastructure program - the Build, Build, Build - which will continually unfold in the months ahead", Pernia said.

"We attribute the country's growth performance to sustained growth in exports", Pernia said, adding net exports grew "very fast" during the third quarter.

They added that as the government aimed to gradually raise infrastructure spending to 5 percent of GDP, all eyes would be on the implementation of the government's tax reform plans, which are still to be approved by Congress. The rebound in exports is deeper than anticipated initially, also providing support to overall economic growth.

Finance Secretary Carlos Dominguez III sees an even better growth narrative for the Philippines in the succeeding quarters as the Duterte administration further ramps up spending on infrastructure and human capital development to supercharge the economy and move closer to financial inclusion.

"The combination of high credit growth, buoyant private investment and fiscal expansion without tax reform could lead to overheating of the economy", the International Monetary Fund said.

"The strong 3rd quarter GDP growth, together with manageable inflation, are in line with our expectations and validate current policy settings", Bangko Sentral Governor Nestor Espenilla Jr told reporters in a text message.

Latest data from the Department of Budget and Management showed that although expenditures of the national government rose by 7% to P683.7 billion in the 3rd quarter of the year, the actual amount fell short by 14.7% from the programmed P801.1 billion for the period. "That [overheating] begins to be a concern if we're persistently growing above potential".

Manufacturing, trade, real estate, renting and business activities were the main drivers of growth for the quarter, the statistics agency said.

Over the next 6 years, the government is targeting GDP growth within a 7% to 8% range annually.

"Our outlook on the Philippine economy remains bright", Diokno elaborated.

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