The economy likely expanded over 6 percent in the third quarter of the year following higher government spending and increased construction activities, a top official of the Finance Department said Tuesday.
Finance Undersecretary and chief economist Gil Beltran said in a text message to The Standard the gross domestic product rate in the third quarter would be “better than the first semester.”
Pressed further for the economic forecast, Beltran said it would even be higher than 6 percent.
The Philippine Statistics Authority is set to release the third quarter GDP figures on Thursday.
The economy expanded 5.3 percent in the first semester of the year after growing 5 percent and 5.6 percent in the in the first and second quarter, respectively. The figures were below the government’s GDP growth target of 7 percent to 8 percent for the full year.
Beltran said higher construction and government spending and robust growth in business process outsourcing industry would be the growth drivers for the remaining months of the year.
The economy should grew at least 8.9 percent in the second half in order to meet the lower end of the government’s target.
Economic Planning Secretary Arsenio Balisacan conceded earlier the government’s target was “quite challenging.”
Meanwhile, Standard Chartered Bank economist Jeff Ng sees the economy growing 6.2 percent in the third quarter. He said strong domestic demand supported the expansion.
“Import growth remained resilient, given the encouraging demand for consumer and raw-material imports,” Ng said in an e-mail.
“Export growth has weakened in recent months; September numbers were particularly weak,” he added.
Latest data showed merchandise exports in September fell 24.7 percent to $4.40 billion, the steepest drop in four years.
Ng also said the manufacturing and services sectors likely bolstered growth in the three-month period.
The economy grew by 6.1 percent in 2014, slower than the 7.2-percent expansion in 2013, but still one of the fastest in Asia.
DBS Bank of Singapore said over the weekend the economy likely expanded by 6 percent year-on-year in the third quarter, faster than the 5.6-percent expansion in the second quarter, as government spending accelerated during the period,
The bank said while inflation was set to miss the official target of 2 percent to 4 percent this year, the gross domestic product growth remained strong. Inflation in the first 10 months averaged 1.5 percent, lower than the government’s target range.
“[The] third-quarter 2015 GDP data next week is likely to show that growth has returned to the 6-percent territory in the period. Even if low base effects might have played a part, it is no surprise that domestic demand remains robust,” DBS said.