By Chino Leyco
The Philippine economy rebounded beyond expectations in the third quarter amid robust public spending that gave the Duterte administration better chances of hitting its growth target for the year despite the drag caused by budget delay.
The country’s economy, as measured by gross domestic product (GDP), accelerated by 6.2 percent in July to September, beating the 6.0 percent market forecast and the Bangko Sentral ng Pilipinas’ 5.8 percent to 6.0 percent estimate.
Likewise, the quarter ending September GDP was stronger than the 5.5 percent in the second-quarter and 6.0 percent in the same period last year.
Socioeconomic Planning Secretary Ernesto M. Pernia said Thursday that the surge in economic activities was driven by government spending which skyrocketed by 39 percent in September.
“The government is committed to speeding up the implementation of its programs and projects that were affected by the budget impasse and the election ban earlier this year,” Pernia said, noting the approval of an updated list of flagship infrastructure consisting of 100 projects.
In the third-quarter, the services sector posted the fastest growth with 6.9 percent, followed by industry at 5.6 percent, while agriculture, hunting, forestry and fishing registered a growth of 3.1 percent.
Following the better-than-expected GDP, Pernia said the local economy needs to expand at least 6.7 percent in October to December to hit the low-end of the full-year target of 6.0 percent to 7.0 percent.
The third-quarter growth has brought the country’s first nine-month expansion pace to 5.8 percent.
Pernia said meeting the 2019 GDP target is “a challenge that we are confidently taking on.”
Finance Secretary Carlos G. Dominguez III is optimistic that the country would hit at least the lower band of the growth forecast as government spending plan further gains momentum amid a cooling inflation.
Dominguez foresaw an even better pickup in growth momentum in the year’s last quarter and into 2020, as the government meets its catch-up spending program before the yearend.
“What the Philippines has shown is its strength, stability, and resilience in the face of adverse conditions such as the global economic slump and the local budget delay,” Dominguez said.
Compared with other major emerging market economies in the region, the Philippines likely ranked second behind Vietnam’s 7.3 percent but higher than China’s 6.0 percent, India’s expected growth of below 6.0 percent, and Indonesia’s 5.0 percent for the period.
“For the remaining months of the year, the benign inflation outlook and more upbeat consumer confidence, are expected to stimulate private consumption, especially with the nearing holiday season that has begun,” Pernia said.