Financial News: Philippine Economy Logs Faster-Than-Expected Growth

Philippine Economy Logs Faster-Than-Expected Growth

11/09/2023 - 01:14:00 (RTTNews)

(RTTNews) - The Philippine economy grew at a faster-than-expected pace in the third quarter underpinned by government spending and exports, official data revealed Thursday.

Gross domestic product posted an annual growth of 5.9 percent, faster than the 4.3 percent expansion seen in the second quarter, the Philippine Statistics Authority said. The rate was forecast to improve moderately to 4.7 percent.

The economy rebounded 3.3 percent on a quarterly basis after shrinking 0.7 percent in the second quarter. The rate was also better than the expected 2.0 percent rise.

On the demand side, household spending grew 5.0 percent year-on-year in the third quarter. Similarly, government consumption moved up 6.7 percent and exports gained 2.6 percent.

On the other hand, gross capital formation, and imports of goods and services logged a contraction of 1.6 percent and 1.3 percent, respectively.

Capital Economics' economist Gareth Leather said the strength in economic growth is unlikely to last as high interest rates and weaker global growth lead to renewed economic weakness in the near term.

Socioeconomic Planning Secretary Arsenio Balisacan said the third quarter growth has made the Philippines the fastest among the major emerging economies in Asia. Balisacan said the economy needs to grow 7.2 percent in the fourth quarter to achieve the 6.0 to 7.0 percent government growth target. The stronger-than-expected third quarter GDP number opens the door for additional tightening from the central bank, ING economist Nicholas Mapa said.

The Bangko Sentral Ng Pilipinas is likely to hike the interest rate at the next meeting on November 16 before raising rates to 7.00 percent at the December meeting, Mapa noted.

Last month, the<a href=https://www.rttnews.com/3399513/philippines-central-bank-resorts-to-unexpected-off-cycle-rate-hike.aspx target=_blank > BSP</a> had raised the target reverse repurchase rate by 25 basis points to 6.50 percent.

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