Philippine economy expands by 6.9% in Q3, beating forecasts

MANILA, Philippines (Updated 12:27 p.m.) 

— The Philippine economy grew faster than expected in the third quarter, making it the second fastest-growing economy in Asia next to Vietnam and ahead of China, the Philippine Statistics Authority reported Thursday.

The Philippines’ gross domestic product—or the value of all finished goods and services produced in the country—clocked a solid growth of 6.9 percent for the July-September period.

This was higher than the upwardly revised 6.7 percent logged in the second quarter and above the 6.5-6.7 percent estimate by market analysts. However, the third quarter GDP was slower than the 7.1 percent recorded in the same period last year.

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

Among the major economic sectors, industry recorded the fastest growth at 7.5 percent followed by services which rose by 7.1 percent.

Sustained growth in exports and improvements in public spending also helped prop up the economy.

Economic managers expect a growth of between 6.5 and 7.5 percent for the Philippine economy this year from 6.9 percent last year.

In a press conference, Socioeconomic Planning Secretary Ernesto Pernia said the government remains on course in achieving its full-year target.

“The Philippines remains one of the best performing economies in Asia,” Pernia said.

“With the year-to-date growth average of 6.7 percent, we are most optimistic that we will be on track in meeting our full-year target range,” he added.

The government plans to spend about P847.22 billion this year on infrastructure alone, equivalent to 5.32% of GDP as part of its “Build, Build, Build” program

According to Pernia, the government expects a pick-up in household consumption in the last quarter of the year due to the holiday season.

“So imagine if both public and private spending are on a roll. We are likely to see the economy steadily going on an upward trajectory,” he said.

Gross national income rose by 6.7 percent from July to September on the back of a 5.7 percent growth in net primary income from the rest of the world.

Per capita GDP surged to 5.4 percent while per capita GNI and per capita household final consumption expenditure expanded by 5.2 percent and 3.0 percent, respectively.

Q4 GDP ‘will be higher’

Asked for his GDP outlook for the last quarter of 2017, Pernia said he expects the economy to grow at a faster pace in October-December period despite risks posed by typhoons that come late in the year.

He also said agriculture, which slowed down by 2.5 percent in the third quarter, is likely to post positive growth in the coming months.

“Well the usual risks would be weather disturbances. But we were saying that we expect though that the... growth of the fourth quarter GDP will be higher or at least match the third quarter’s performance,” Pernia said.

Meanwhile, another domestic risk that could affect the government’s bullish outlook for the fourth quarter would be “an upward price pressures from oil prices,” National Economic and Development Authority Assistant Secretary Carlos Abad Santos said.