DOF: At least 6.5% GDP growth in Q3 on strong gov’t spending

The economy likely grew at a faster rate of at least 6.5 percent in the third quarter on the back of strong government spending and public investments, the Department of Finance (DOF) said Wednesday.

Finance Secretary Carlos G. Dominguez III told finance beat reporters in a Viber message that the DOF “expects GDP growth in the third quarter to be higher than the first-half revised growth of 6.4 percent—at least 6.5 percent—due to the 30-percent growth in national government expenditures and the 8.8-percent real growth in manufacturing production,” citing a report from the agency’s chief economist, Undersecretary Gil S. Beltran.

“We also expect growth to be investment-led due to the 47-percent rise in the national government’s capital outlays,” Dominguez added.

Based on updated Philippine Statistics Authority (PSA) data also released Wednesday, or ahead of the announcement of the third-quarter economic performance on Thursday, the GDP actually grew by a faster 6.2 percent in the second quarter.

Last August, the government announced that the economy expanded by just 6 percent during the April to June period, the slowest in three years.

Economic managers had blamed the slower-than-expected second-quarter growth rate to high inflation as well as the implementation of a number of environmental policies that affected the agriculture and services sectors, including the six-month closure and rehabilitation of top tourist island destination, Boracay.

But the PSA said the following sectors contributed to the upward revision of the second-quarter GDP growth figure: other services; real estate, renting and business activity; as well as mining and quarrying.

The adjusted second-quarter figure brought the first-half average to a higher 6.4 percent, within the government’s revised full-year target range of 6.4-6.9 percent.

Last month, the Cabinet-level Development Budget Coordination Committee (DBCC) slashed this year’s GDP growth goal from 7-8 percent previously, which Dominguez had attributed to a confluence of external developments, including the US-China trade war, higher global oil prices, as well as elevated interest rates. /kga