MANILA, Philippines–The economy could have grown faster in the third quarter of the year, but the country might only reach the lower end of the government’s 2014 growth target because of external shocks, Socioeconomic Planning Secretary Arsenio M. Balisacan said on Tuesday.
Addressing reporters on the sidelines of the Semiconductor and Electronics Industries in the Philippines Foundation Inc.’s 13th CEO Forum, Balisacan said that it was possible for the Philippine economy to accelerate by a faster pace during the July to September period over that of the previous quarter.
On Monday, investment bank First Metro Investments Corp. (FMIC) said in its monthly Market Call report that economic growth likely accelerated in the third quarter, with the gross domestic product (GDP) seen to expand by 6.5-7 percent in the second half—faster than the 6 percent posted in the first six months of the year.
FMIC, however, said that the full-year growth would likely fall short of the government goal following the slower-than-expected expansion posted in the first quarter.
Balisacan maintained that the 6.5-7.5 percent full year growth target could still be attained.
But the economy must expand by at least 6.9 percent in the second half of the year for it to attain the lower end of the 2014 GDP goal, the official added.
“Achieving the lower end of the [target] range is still a possibility, but the upper end is now a huge challenge,” Balisacan said.
While the country’s performance in the second half is expected to be better than that of the first half, Balisacan noted that external shocks, such as the problems now facing Europe, continued to weigh on domestic growth prospects.
“But as shown in recent years, although some regions of the world had been shaky, the Philippine economy remained quite stable. So I suppose the impact [of external risks] wouldn’t be as great compared with our neighbors that have greater exposure,” Balisacan said.
On the domestic front, Balisacan pointed out that the manufacturing and trade sectors remained robust while personal consumption and demand, as well as investments, continued to be on the rise.
Latest government data showed that exports rose by 9.2 percent year on year to $40.748 billion as of end-August, while import payments during the same eight-month period went up by 4 percent to $42.446 billion.