The Philippine economy grew by 7.1 percent in the third quarter of the year, the fastest among major Asian emerging markets, the National Economic and Development Authority said on Thursday.
"This growth is above the median market expectation of 6.8 percent," Policy and Planning Undersecretary Rosemarie G. Edillon told reporters in a briefing at The Heritage Hotel in Manila.
The economy has hit its stride in the third quarter, growing strongly by 7.1 percent, as measured by the gross domestic product (GDP), and cements the chance of achieving the target of 6.0 to 7.0 percent for the whole of 2016, the NEDA said.
"We are the fastest-growing among major Asian emerging economies that have already released data for the quarter. We are higher than China’s 6.7 percent, Vietnam’s 6.4 percent, Indonesia’s 5.0 percent, and Malaysia’s 4.3 percent," Edillon noted. India has not yet released its data.
The third quarter output was mainly driven by the services sector which expanded by 6.9 percent and industry which grew by 8.6 percent, Philippine Statistics Authority data showed.
With the projected population reaching 103.5 million in the third quarter of 2016, per capita GDP grew by 5.3 percent and per capita gross national income by 4.6 percent. "These are both higher than the respective growth of 4.4 percent and 4.5 percent in 2015," the statitics office noted.
The laggard agriculture sector rebounded by 2.9 percent in July to September, after five consecutive quarters of contraction.
"From the supply or production side, we are happy to note the recovery signs of agriculture, which is one of the major development priorities of this administration," Edillon noted.
The third quarter output was in line with the 6.3 to 7.3 percent forecast by the NEDA and higher than the 7 percent second quarter GDP. It also topped the 6.2 percent recorded in the third quarter of 2015.
Sustainable demand side
Edillion noted it would not be difficult now to achieve the full-year growth target, considering the economy needs grow by at least 3.4 percent growth to reach the low-end of the target range at 6.0 percent.
"To reach the high-end target of 7.0 percent, we need to grow by 6.9 percent in the fourth quarter," she added.
The Duterte administration has set a GDP target of 6.0 to 7.0 percent for 2016, revising the Aquino administration's 6.8 to 7.8 percent goal.
From the demand side, investments continue to drive the growing. This indicates its sustainability, according to the NEDA.
"Growth in investments for durable equipment remained strong. Private sector investments in construction grew significantly by 16.2 percent this quarter from last year’s 4.0 percent. Public investment in infrastructure remained strong, with public construction expanding by over 20 percent for the third quarter, Edillon noted.
Private consumption also grew by 7.3 percent from 6.1 percent, "supported by low inflation, low interest rates, better labor market conditions and the steady, though slower growth in overseasr Filipinos' personal remittance."
The NEDA official took note that the anti-poverty measure Pantawid Pamilyang Pilipino Program (4Ps) "provided additional boost to consumer demand."
External demand likewise improved with growth in exports of goods growing by 7.8 percent.
"All things considered, our economy’s strong growth in the third quarter is a very good sign of things to come," Edillon said.
However, possible downside risks to the economy remain:
- The vulnerability of agriculture and fisheries to La Niña
- The sluggish recovery in Europe
- The uncertainties about economic policies in the UK and US
- The “Saudization” policy of replacing foreign workers with Saudi nationals
"While peace talks between the government and various rebel groups are ongoing, there is a need to consolidate efforts that will pave the way for lasting peace and development in the countryside," the NEDA official said.
Source: www.dfa.gov.ph Date accessed: 18 November 2016