The Philippine economy likely grew by between 6.3 percent and 7.3 percent in the third quarter, a range higher than the government’s full-year target, the country’s chief economist said Thursday.
Socioeconomic Planning Secretary Ernesto M. Pernia told reporters that state planning agency National Economic and Development Authority also expected gross domestic product (GDP) growth for the entire year at a similar 6.3-7.3 percent range, with 6.5-6.6 percent growth deemed “achievable.”
The government’s GDP expansion target for 2016 was set at a “conservative” range of 6 to 7 percent, following a robust 6.9 percent average growth in the first half.
Pernia, who is also Neda Director-General, said accelerated infrastructure spending boosted the third quarter economic growth.
The latest Department of Budget and Management data showed that in August alone, the government’s expenditures on infrastructure and other capital outlays jumped by a third year-on-year to P34 billion.
The increase in infrastructure spending in August was a result of more roads, school buildings and irrigation facilities built or repaired that month, the DBM said in a recent report.
From January to August, the amount spent on infrastructure amounted to P301.7 billion, up 40.9 percent year-on-year.
On top of infrastructure buildup, the Neda chief said strong consumer spending also boosted the economy during the period.
Pernia, however, noted that exports were still “soft” and “not doing well,” and that might be a drag on the economy.
The latest Philippine Statistics Authority data showed that merchandise exports slid for the 17th straight month in August due largely to weak global demand.
The 4.4-percent drop in merchandise exports to $4.9 billion in August had been attributed by Neda to lower shipments to overseas of Philippine-made agro-based goods, manufactures and petroleum products.
Total exports for the first eight months of the year declined by 7.8 percent year-on-year to $36.4 billion.
Sustained strong domestic demand coupled with robust election-related spending lifted second-quarter growth to 7 percent.
The second quarter growth, according to the Neda, was the fastest quarterly expansion in more than two years. This made the Philippines among the fastest-growing economies in the region during the period.
President Duterte’s economic managers had scaled down the previous administration’s growth target of 6.8-7.8 percent for this year, citing the adjustments to be made by the new administration in the first few months of its term.
The third-quarter GDP growth figure will be announced by the government on Nov. 17.