Q3 GDP likely grew faster than 6% — report

ECONOMIC GROWTH likely picked up last quarter from the preceding three months’ disappointing six percent, analysts of First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in their latest joint assessment, even as they still slashed their full-year 2018 projection.
The analysts now see full-year growth at 6.5-7%, down from their original forecast of 7-7.5%.
The updated forecast matches state economic managers’ tempered 6.5-6.9% full-year 2018 outlook that compares to an original 7-8% target. The Cabinet officials said they needed to be more realistic given tighter credit conditions, the impact of a trade war between the United States and China, as well as surging global oil prices.
The Philippines’ gross domestic product (GDP) expanded 6.3% last semester, compared to 6.6% a year ago.
It grew by 6.7% in 2017, with the third quarter alone posting 7.2% — the fastest clip that year.
The Philippine Statistics Authority is scheduled to report September factory output and October inflation data on Nov. 6, September merchandise trade and third-quarter farm output data on Nov. 7, and third-quarter GDP performance on Nov. 8.
The central bank’s Monetary Board then meets for its seventh and penultimate policy review for the year the succeeding week on Nov. 15.
“The outlooks from the demand side — investments and exports — still look positive while slowing manufacturing and commodity prices rising at a faster pace cloud this view,” the economists said in the October issue of The Market Call published on Tuesday.
“Nonetheless, GDP should still handily grow by more than six percent in Q3,” they added.
“Capital goods imports soared by 39% in July, while National Government spending added fuel to growth with a 29% uptick, likely driven by infrastructure and capital outlays. Exports had their third consecutive month of growth, albeit still at a mild pace,” the report read, noting that “red-hot investment spending” likely helped prod overall economic expansion.
This, in turn, should help make up for tepid factory output growth and tempered consumer spending at a time of elevated inflation.
Prices of widely used goods climbed by 6.2% in the third quarter. Other bank analysts have said that this likely curtailed household consumption as they reeled from rising prices of food and fuel.
At the same time, FMIC and UA&P economists said they expect inflation to be on a downtrend in 2018’s last three months, with October, November and December rates at 6.4%, 6.1% and 6.2%, respectively.
On the monetary policy front, economists are seeing another rate hike from the Bangko Sentral ng Pilipinas amounting to 25 basis points this quarter. This is to cover for higher bus and jeepney fares next month, even as the rise of prices of rice, food and oil is expected to ease. — Melissa Luz T. Lopez