ING: Philippines' Q3 GDP likely grew 6.3%

MANILA, Philippines - Dutch financial giant ING Bank believes the country’s economic expansion picked up and exceeded six percent in the third quarter on the back of accelerated government spending.

Joey Cuyegkeng, chief economist at ING Bank Manila, said the country’s gross domestic product (GDP) grew 6.3 percent in the third quarter.

This would be the second quarter that the country’s GDP growth accelerated.

The country’s economic expansion picked up speed, growing 5.6 percent in the second quarter from the revised five percent in the first quarter.

In all, the GDP growth slowed down to 5.3 percent on the firsth half from 6.2 percent in the same period last year due to weak global demand and lack of government spending.

Aside from improved government spending, Cuyegkeng said other factors that contributed to faster growth in the third quarter included higher peso value of remittances from overseas Filipino workers as well as steady loan growth.

“Accelerating government spending, higher year-on-year peso value of OFW remittances, moderate loan growth would support a stronger third quarter growth relative to first half growth of 5.3 percent,” he said.

Cuyegkeng said the downside risk to growth comes from a larger drag from net exports in the third quarter.

Data from the Philippine Statistics Authority (PSA) showed the country’s total exports contracted 6.9 percent to $43.75 billion in the first nine months from last year’s $46.97 billion.

This after the country’s merchandise shipments plummeted 24.7 percent to $4.4 billion in September from $5.85 billion in the same month last year. This was the steepest fall since the country recorded a 27 percent plunge in export earnings in September 2011.

Likewise, he explained the country’s agriculture sector likely booked a flat growth in the third quarter.

The sector is expected to start experiencing the impact of the prolonged and severe El Niño weather disturbance.

Cuyegkeng said ING Bank also expects the GDP to expand 6.3 percent in the fourth quarter amid robust domestic demand and improved government spending.