Economic growth likely improved in the third quarter but not enough to allow the country to catch up with the government’s full-year target, which would likely be missed unless a spike is seen in the last three months.
Singapore’s DBS Bank, the largest lender in the region, said the biggest drag on the economy would be government spending, which has grown at a sluggish pace.
“There is some drag from fiscal spending,” DBS economist Gundy Cahyadi said in a note on Thursday.
“The underlying support from private consumption remains resilient, supported by resilient OFW remittances among others,” he added.
For 2014, DBS now sees the Philippine economy growing by 6.4 percent, which is short of the government’s full-year target range of 6.5 to 7.5 percent.
In the third quarter, the economy likely expanded by 6.7 percent, which is better than the 6.4 percent recorded in April to June.
Economic growth disappointed in the January to March period of the year, reaching just 5.7 percent, due to weak global demand as a result of a severe winter in the United States.
The United States is the Philippines’ largest trading partner.
Data for the economy’s performance in the third quarter will be released by the end of this month.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed cash transfers from migrant workers rose by 7.9 percent in September to $2.11 billion.
For the January to September period, remittances were up 6.1 percent, which is higher than the BSP’s forecast of an expansion of 5 percent.
National government disbursements for the month of September totaled P159.8 billion, higher than year-ago figures by 9.5 percent.
For the first three quarters of the year, expenditures amounted to P1.456 trillion, expanding 6.5 percent year-on-year.
Cahyadi said exports may also be a source of strength for the economy, with shipments beating estimates on the back of strong demand from advanced markets.
Exports from the Philippines have grown faster than the rest of Southeast Asia since June. Philippine merchandise exports grew by 15.7 percent in September 2014.