By Lourdes O. Pilar
THE ECONOMY grew faster than previously estimated in the fourth quarter of 2018, the Philippine Statistics Authority (PSA) reported on Thursday.
The PSA said its latest estimate shows the country’s gross domestic product (GDP) — which indicates the value of final goods and services produced within a country — expanded by 6.3% in 2018’s last three months, faster than the initial 6.1% estimate given in January.
According to the PSA, major upward revisions were made in trade and repair of motor vehicles, motorcycles, personal and household goods at 6.7% from the initial 5.9%, as well as public administration and defense, compulsory social security at 14.7% from 12.6%.
The fourth-quarter 2018 revision comes ahead of the release of preliminary estimates for this year’s first quarter GDP on May 9.
Even with the fourth quarter revision, the annual GDP growth for 2018 was kept at 6.2%.
“The elevated borrowing costs stemming from BSP’s (Bangko Sentral ng Pilipinas) aggressive rate hike cycle continued to stymie both consumption and capital formation, with the government needing to support growth through accelerated spending,” ING Bank NV-Manila senior economist Nicholas Antonio T. Mapa said in a statement.
Household spending growth in the fourth quarter was revised downwards to 5.3% from the 5.4% initially reported.
Likewise, capital formation growth in the fourth quarter of 2018 was updated to 4.9% from 5.5%.
For this year, Mr. Mapa said he expected a “strong rebound” in consumption given the slowdown in inflation to 3.8% in February from a nine-year-high 6.7% in September and October last year.
“However, government spending will be challenged given the ongoing budget delay, while capital investment may also struggle given the tightening liquidity conditions and as the effects of the BSP’s 175-bps (basis point) rate hike continue to sap momentum,” he added.