The economy likely grew more than 6 percent in the third quarter, representing the first three months in office of the Duterte administration, Economic Planning Secretary Ernesto Pernia said Thursday.
Pernia said the gross domestic product growth rate in the third quarter probably settled between 6.3 percent and 7.3 percent, in line with the 7-percent expansion in the second quarter.
He said the higher end of the forecast was supported by faster infrastructure spending and robust domestic consumption brought about by new investments in the country.
Pernia said the growth was dragged down by the weak export performance in the third quarter.
The economy grew 7 percent in the second quarter, bringing the average expansion in the first semester to 6.9 percent.
Pernia said the impact of Duterte’s tirades against the US would likely have an impact on fourth-quarter GDP growth as there were reports that foreign direct investments from the US went down.
“I don’t think the anti-US statements of the president will already be reflected in the third quarter,” Pernia said.
“I think the FDI from the US has gone down, as there are already reports, although China’s FDI is picking up. China cannot compensate for the loss in US [investments] because China was coming from a low base and the US was at a much higher base,” he said.
Latest available data from Bangko Sentral ng Pilipinas showed that net inflows of foreign direct investments jumped 95 percent in the first half to $4.2 billion from $2.2 billion a year ago.
Pernia said the business process outsourcing sector was expected to sustain its growth, as foreign companies continued to find their Philippine operations profitable.
Pernia, however, said the likelihood of Donald Trump’s victory in the US presidential election could have an impact on the BPO sector in 2017.
Trump earlier said he wanted to keep jobs in the US, putting pressure on companies that outsourced operations to countries such as the Philippines.
Data from the Information Technology and Business Process Association of the Philippines showed that in 2015, the BPO industry generated 1.2 million direct jobs and $22 billion in revenues.
“The BPOs will not pull out. I don’t think there will be a pullout of BPOs except if Trump wins. But that will happen next year maybe. It is profitable to private sector businesses [to do business here]. The US government cannot compel the private sector,” Pernia said.
The BPO sector is seeking a dialog with Duterte to clarify his policy on the outsourcing industry. American companies account for more than 70 percent of the Philippine BPO sector.
The BPO industry is credited for the resurgence of the real estate sector, with hundreds of office buildings under development to meet the requirements of more companies locating in the country.