Economic growth in Q3 likely to top gov’t target

Economic growth in the third quarter of the year likely topped the government’s official target, sustaining the momentum built up in the first semester, Moody’s Investor Service said.

The debt watcher said most economic indicators support the expectation that the country likely maintained its position as Southeast Asia’s fastest-growing economy in the July to September period.

“The Philippines was one of the world’s fastest-expanding economies through the first half of 2013, and this likely continued in the September quarter,” Moody’s said in a report released Friday.

The Philippine economy grew by 7.6 percent in the first semester of 2013, outpacing all other markets in the region.

This was also higher than the government’s official growth target for 2013, which was set at 6 to 7 percent, supported by an increase in government spending for infrastructure and strong consumer demand. Moody’s said growth for the third quarter may reach 7 percent in the third quarter.

The government will release official third quarter economic data on November 28.

Domestic consumption, supported by remittances from overseas Filipino workers (OFW), makes up 70 percent of the country’s gross domestic product (GDP). The Bangko Sentral ng Pilipinas (BSP) expects remittances from OFWs to grow by 5 percent year-on-year to $22.5 billion.

“The high-frequency data have been strong, with industrial production, bank lending and money supply surging ahead,” Moody’s said.

“For the third quarter, the signs are all positive. We may see a modest pullback in government investment, and GDP growth will likely slow, but only slightly,” Moody’s said.

However, Moody’s said fourth quarter growth may slump due to the effects of Supertyphoon “Yolanda” (international codename: Haiyan), which ripped through the Visayas last November 8.

Paolo G. Montecillo