The country’s gross domestic product grew 6 percent in the third quarter, making the Philippines the third-fastest growing economy in Asia, on the back of higher public spending and household demand, the Philippine Statistics Authority said Thursday.
“The third-quarter growth is an improvement from 5.8 percent in the previous quarter and from 5.5 percent in the third quarter in 2014. Growth in the first nine months of 2015 is now 5.6 percent, making a 6-percent full-year growth very much likely, given even better prospects for the last quarter. This makes the Philippines one of the fastest-growing major Asian economies,” said Economic Planning Secretary Arsenio Balisacan.
The country’s GDP growth was the third fastest in Asia, after China’s 6.9 percent and Vietnam’s 6.8 percent. India has yet to report its third-quarter growth.
The 6-percent growth in the third quarter, however, was below the government’s target of 7 percent to 8 percent for the full year.
Finance Secretary Cesar Purisima said strong demand continued to fuel growth, with private consumption accelerating 6.3 percent and public consumption leaping 17.4 percent.
“We are confident that after five years, we have laid our house with firmer foundations. But reform is a game that has no end. Increasingly, we look to our next set of leaders to carry the work of charting our future forward,” Purisima said.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the latest growth “confirms that the economy doesn’t really need further monetary stimulus at the moment.”
“But we are mindful of risks from natural disasters and global developments including slower-than-expected growth among our trading partners. Further, inflation is seen to have bottomed last month. As such we believe monetary settings continue to be appropriate for now. In addition to risks already mentioned we monitor commodity price developments,” Tetangco said.
The gross national income, which factors in remittances from other countries, grew 5.8 percent in the third quarter, faster than 3.9 percent in the same quarter last year.
“As the export market continues to decline with slumping foreign demand and sagging commodity prices, we can count on looking inwards with consumption as a consistent driver of growth. We are confident revenues from remittances and the BPO [business process outsourcing] industry constitute a one-two punch further accelerating our growth at least on the demand side,” Purisima said in a statement.
Data showed that the services sector grew 7.3 percent in the third quarter, faster than the 5.6-percent expansion in the same period last year. This performance was also the highest since the 7.4- percent growth recorded in the third quarter of 2013.
The agriculture sector also rebounded in the third quarter with a growth of 0.4 percent from a 2.6-percent contraction last year.
“The modest growth of the agriculture sector, on the other hand, shows the impact of El Niño, as yields and harvests for palay [rice] and sugarcane were most affected due to inadequacy of irrigation water and rain. The slight improvement in the sector’s performance is largely contributed by stronger growth in livestock, poultry, and fishery subsectors,” Balisacan said.
Growth in the industry sector slowed down to 5.4 percent from 7.8 percent last year.
Meanwhile, household consumption grew 6.3 percent as Filipino households increased spending on food and non-alcoholic beverages, miscellaneous goods and services, transport, restaurants and hotels and communication.
Both public and private sector investments remained strong, as capital formation rose 8.9 percent, from the 0.2-percent contraction in the same period last year.
Balisacan said there were still risks to economic growth such as the lingering effects of El Niño and uncertainties brought by impending change of leadership with the upcoming elections.
Balisacan said a 6.9-percent growth in the fourth quarter was “achievable.” The economy should grow 6.9 percent in the fourth quarter to reach the lower end of the “realistic target” of 6 percent to 6.5 percent for the whole year, he said.
“[The] 6.5 percent for the full year is still very achievable. Clearly the outcome of national election will have an impact on the economy,” Balisacan said.
Balisacan said the government would also keep the 7 percent to 8 percent full-year target for 2016.
“Hopefully, the global environment will be much favorable next year. So far, the forecast indicates slight focus on our domestic constraints, infrastructure and recovery in construction and small-and-medium enterprises development,” Balisacan said.