MANILA, Philippines - The economy expanded by just 5.3 percent in the third quarter this year. It was the second time that the economy posted a quarterly growth of less than six percent. Growth in the first quarter was 5.7 percent then accelerated to 6.4 percent in the second quarter.
Socio-Economic Planning Secretary Arsenio M. Balisacan said just achieving the low end of the original target – 6.5 percent to 7.5 percent -- would now pose a challenge.
“The numbers appear to still allow us to hit the lower end of the six-percent range,” Balisacan said in a press presentation yesterday. “A 6.8-percent fourth quarter growth rate is very doable, as we have already experienced a quarter that grew by over seven percent,” he said. But to achieve the lower end of the target, the economy must expand by 8.2 percent in the fourth quarter, he added.
For its part, the Bangko Sentral ng Pilipinas yesterday said current policy settings should continue supporting economic growth.
“While GDP surprised on the downside, we expect GDP would continue to be buoyed by private consumption and as the government clears up spending bottlenecks,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters.
“With the inflation outlook generally manageable over the policy horizon, the BSP’s current policy stance should be able to help keep economic activity supported,” he added.
Malacañang, meanwhile, said that with increased spending and other measures, the Aquino administration is confident the economy will be able to bounce back after it grew at a slow 5.3 percent to now rank fourth among Asian economies.
From being the leader or second best performer, the Philippines now lags behind China, Vietnam and Malaysia in terms of growth.
In a press briefing, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the Palace is behind the National Economic and Development Authority’s continuing positive outlook on the economy in the succeeding quarters and onward to 2015.
“Private sector performance is expected to remain robust. Government spending is likely to improve and the impact of the post-Yolanda reconstruction efforts will gain further traction,” he added.
“We still remain the fourth fastest (growing economy) in the region, and remember we are coming from a higher base (compared to) Vietnam and Malaysia,” Balisacan, who is also the Director General of the NEDA, said.
He said government expects a spike or strong upward growth in the last quarter and in the first two quarters of 2015, due to the resurgence of reconstruction work in the typhoon Yolanda-damaged areas.
The manufacturing sector contributed the most to the growth observed in the third quarter. This was despite the deceleration in its gross value added from 8.9 percent in 2013 to 7.2 in 2014.
Real estate, renting and business activities (RERBA) grew by 6.2 percent, a marked slowdown from its growth of 11.6 percent the year before. The slowdown was due to the real estate (26-percent to 6.2 percent), while growth in renting and other business activities remained robust at 11.5 percent.
“Private sector developers remained bullish due to strong business process management (BPM) sector demand and traditional office takers. – With Aurea Calica