Economic indicators point to strong Q4 growth—Diokno
By Chino S. Leyco
The Department of Finance (DOF) expects strong fourth-quarter growth amid improving jobs market, rising factory output, strengthening peso, and falling global oil prices.
Finance Secretary Benjamin E. Diokno said on Thursday, Dec. 8, that recent economic numbers of the country all point to a sustained growth in the final three months of the year.
In particular, Diokno cited that jobs market continued to improve with unemployment rate down to its lowest level in 17 years.
The Philippine Statistics Authorty reported on Wednesday that unemployment rate fell to 4.5 percent in October, returning to the record-low level last seen before the Covid-19 pandemic hit in 2020.
Diokno also noted that manufacturing output has risen while capacity utilization rate improved.
The October monthly integrated survey of selected industries showed that the volume of production index (VoPI) went up by 5.1 percent, from the revised 4.1 percent in September.
The latest VoPI was the manufacturing sector’s fifth consecutive month of growth.
The finance chief, likewise, emphasized that the peso has stabilized and is now growing stronger against the US dollar.
The peso appreciated back to the 55 level in recent trading days after hitting the 60-a-dollar level in October.
Lastly, oil prices are falling to near pre-Russian invasion of Ukraine levels due to concern about global recession, Diokno said.
Brent sank below $80 for the first time since January, while West Texas Intermediate struck its lowest since December.
“With strong fourth-quarter growth, the implication is that with the peso stabilizing and oil prices falling, inflation which is the top concern of the present administration will soon fall,” Diokno said.
Last Dec. 6, the World Bank raised its gross domestic product (GDP) outlook for the Philippines to 7.2 percent from an earlier projection of 6.5 percent in September.
World Bank said the upward revision was driven by “robust domestic activity” as well as the stronger-than-expected third-quarter economic performance.
“Strong domestic demand is driving growth, which is more than compensating for the unfavorable global environment,” World Bank said.
“The economic reopening this year is unleashing pent-up demand, contributing to jobs and incomes recovery, and benefitting the contact-intensive services sector,” the bank added.
The economy grew 7.6 percent in the third quarter, exceeding market consensus projection of 6.3 percent. This brought the nine-month average at 7.7 percent, above the government’s target of 6.5 percent to 7.5 percent.