Economic growth likely decelerated in the third quarter due to a slowdown in industrial production and the state’s inability to rollout infrastructure projects more quickly during the period.
Moody’s Analytics, a think tank, said the economy likely grew by 5.9 percent in July to September this year.
If this projection comes to fruition, the government’s full-year growth target of an expansion of 6.5 to 7.5 percent would be virtually out of reach, unless a spike is seen in the last three months of the year.
“The flow of new government infrastructure projects slowed, which may weigh on gross domestic product (GDP) growth,” Moody’s Analytics said in a report on Friday. Moody’s Analytics is affiliated with credit ratings firm Moody’s Investor Service.
“Industrial production, the best monthly gauge of overall growth, slowed in the three months to September,” Moody’s said.
Latest data showed that factory output grew by just 3.2 percent in September, the slowest in six months and much slower than the 19-percent expansion a year ago.
In the second quarter, the Philippines tied with Malaysia as Southeast Asia’s fastest-growing economy as GDP growth reached 6.4 percent. This brought the first half average to 6 percent.
Economic managers said growth for the second half should be near or more than 7 percent for the low end if the state’s target was to be reached.
Despite the slower growth, the think tank remained optimistic on the Philippines’ prospects.
“Production has fully recovered from last year’s typhoon and business sentiment remains upbeat,” the Moody’s report said. “Conversely, export growth has accelerated and imports have improved, reflecting a stronger domestic economy,” it added.
The International Monetary Fund and World Bank expect the Philippines’ growth to fall short of the government’s forecast for the year. The IMF sees growth for this year to reach 6.2 percent, while the World Bank is projecting 6.4 percent. Paolo G. Montecillo