spot_img
28.6 C
Philippines
Friday, March 29, 2024

BPI sees economy growing 6.3% in Q3

- Advertisement -

An economist of Bank of the Philippine Islands said the economy likely grew 6.3 percent in the third quarter, faster than the 5.3-percent expansion a year ago.

BPI lead economist Emilio Neri Jr. said full-year growth would also settle at 6 percent, amid robust domestic demand.

“In the third quarter, the Philippines is set to post a 6.3-percent year-on-year expansion, distinguishing itself from the rest of the Asean pack, as it looks to affirm its ‘cut above the rest’ story,” Neri said.

“Third quarter growth will rebound from its current sub-6 print with the national government ramping up spending in the stretch run of the current administration, in stark contrast to the contraction [of 5.3 percent] posted in the third quarter 2014 at the height of the DAP [Disbursement Acceleration Program] debacle,” Neri said.

He said robust domestic demand and still low borrowing costs would help drive household consumption and investments. He said the services sector was a stable source of economic growth as several corporations reported decent third-quarter earnings.

- Advertisement -

He also said the industrial sector might continue to be a positive influence on the overall GDP numbers with construction and manufacturing posting modest gains.

Neri said the expected stronger print in the third quarter might be the highlight for the year as the fourth-quarter growth this year would need to hurdle a strong fourth-quarter print last year of 6.9 percent, which was later revised to 6.6 percent.

“Nonetheless, we are not counting out the possibility of the Philippines posting a 6 percent full”year GDP growth print given the potential of a stronger contribution of the second half to the overall growth number as the 2016 presidential elections come closer,” Neri said.

Neri said the trade sector was badly affected by the slowing global demand as exports contracted by 6.9 percent year-to-date and the July-August trade balance posted a deficit of $1.842 billion. He said the negative impact to growth might come from the exports sector.

GDP grew 5 percent in the first quarter, before rebounding to 5.6 percent in the second quarter. This brought the first half average to 5.3 percent, below the government’s official projection of 7 percent to 8 percent this year.

Economists earlier blamed the government’s anemic fiscal spending, which actually began in the third quarter last year, as the main culprit for the sluggish performance in the first half. The Supreme Court earlier ruled DAP as unconstitutional. However, the high tribunal reversed the ruling later.

“After struggling to disburse funds, the national government appears to have gained its bearings and has shown renewed resolve to complement the rapid private sector expansion. Thus, we can expect the third-quarter GDP to post a 6.3 percent print on sustained consumer spending, investments and a renewed push from the government side,” Neri said.

The government is set to release the third-quarter GDP data on Nov. 26.

Neri said the Philippines might still be able to catch up with Vietnam as the fastest-growing economy in the Asean region in the months ahead.

Neri said the low interest rate environment helped boost private consumption. Car manufacturers reported a 24-percent growth in the third quarter sales and a 20-percent full-year growth.

BPI said the Philippine economy might grow stronger in 2016 at 6.7 percent.  The economy grew 6.1 percent in 2014 and 7.2 percent in 2013.

- Advertisement -

LATEST NEWS

Popular Articles