Q3 growth seen at more than 6%

THE PHILIPPINE economy likely expanded by more than 6 percent during the third quarter, faster than the gross domestic product (GDP) growth rates posted in the first two quarters, mainly as government spending picked up during the July-to-September period, according to majority of the economists polled by the Inquirer last week.

The government will announce the third-quarter GDP growth performance this Thursday.

The country’s GDP grew by 5.3 percent in the first semester, making economic managers concede that the 7 to 8 percent official growth target for the year would not be reached. The “realistic” 6 to 6.5 percent GDP growth by yearend would entail an expansion of at least 6.7 percent in the second half to hit its lower end.

According to University of Asia and the Pacific economist Victor A. Abola, the economy likely grew by 6.5 percent in the third quarter as he claimed that there was “no underspending” during the period. Government underspending on public goods and services was largely blamed for the slower GDP growth of 5 percent and 5.6 percent posted in the first and second quarters, respectively.

The latest Treasury data showed that end-September expenditures hit more than P1.6 trillion, 12-percent higher than last year’s almost P1.5 trillion, but 14-percent lower than the nine-month program of more than P1.9 trillion.

Security Bank economist Patrick M. Ella, ING Bank Manila senior economist Joey Cuyegkeng and BPI economist Emilio S. Neri projected a 6.3-percent growth during the third quarter.

“Government spending has improved tremendously since March. The third-quarter headline government spending growth and adjusted government spending growth of around 19 percent year-on-year and 23 percent year-on-year is a major achievement, although part of the strong third-quarter growth is due to base effects,” Cuyegkeng noted in an e-mail. Government spending in the third quarter of last year slowed mainly due to the “chilling effects” of the Supreme Court ruling that the Disbursement Acceleration Program, a stimulus package aimed at fast-tracking public expenditures to spur economic growth, was unconstitutional.