Faster 3rd quarter economic growth seen

The economy likely expanded faster in the third quarter than the first half given the expected sustained recovery in the agriculture sector and strong performance of the export industry, the country’s chief economist said yesterday.

Socioeconomic Planning Secretary Ernesto M. Pernia told reporters that while gross domestic product (GDP) growth was not likely to hit 7 percent in July to September, it was expected to be higher than the average of about 6.5 percent in the first six months.

The first half GDP growth was at the lower end of the 6.5-7.5 percent full-year growth target of the government for 2017.

The government is expected to release the third quarter GDP report on Nov. 16.

“I hope it will be in that vicinity (of 7 percent) but I can’t be sure. But there are many drivers that are likely to boost growth,” said Pernia, who also heads state planning agency National Economic and Development Authority.

According to Pernia, “exports are very good, agriculture, and investments are also looking good.”

As of August, merchandise exports rose by 13.3 percent year-on-year to $42.1 billion.

The net inflow of job-creating foreign direct investments from January to July, meanwhile, declined by 16.5 percent year-on-year to $3.904 billion, although two recently infused FDIs were seen boosting inflows in the third quarter. These were the $1.3-billion deal between Energy Development Corp. and the consortium of Macquarie Infrastructure and Real Assets and Arran Investment Pte. Ltd., and the $1-billion acquisition of homegrown cigarette manufacturer Mighty Corp. by Japan Tobacco International’s Philippine unit.

Pernia noted that OFW (overseas Filipino workers) remittances had also been very strong. This, he said, boosted consumer spending.

Cash remittances coursed through banks by Filipinos abroad as of August rose by 5.4 percent year-on-year to $18.6 billion.

In a Sept. 28 report, economic managers belonging to the Development Budget Coordination Committee said that a 6.5-percent GDP growth in 2017 was “well within the reach of government.”

“Household consumption spending will be supported by high consumer confidence and modest inflation. Oil prices are expected to remain moderate as global oil stocks are close to record highs, contributing to subdued energy prices,” the DBCC had said.

“Government consumption and public construction will further support demand as national government disbursements are expected to improve further in the second half of 2017,” according to the DBCC.

The Duterte administration was ramping up infrastructure spending in line with its ambitious “Build, Build, Build” program aimed at ushering in the “golden age of infrastructure.”

Under “Build, Build, Build,” the government will roll out 75 flagship, “game-changing” infrastructure projects, with about half targeted to be finished within President Duterte’s term. This program calls for the construction of up to P9 trillion worth of hard and modern infrastructure until 2022.