The Philippines’ economic growth likely fell to a four-year low last year and below the government’s narrower target range of 6-6.5 percent, the country’s chief economist conceded on Wednesday.
Across 20 economists’ forecasts compiled by the Inquirer this week, the majority projected expansion in the fourth quarter to be faster than the third quarter’s revised 6-percent growth rate, but the average full-year rate still falling short of goal.
The Philippine Statistics Authority on Wednesday said the third-quarter GDP (gross domestic product) growth figure was downgraded from the 6.2 percent announced in November.
As such, end-September GDP growth averaged 5.7 percent, needing an expansion of at least 6.9 percent during the fourth quarter to reach 6 percent for the entire year.
However, Socioeconomic Planning Secretary Ernesto Pernia told the Inquirer that 6.9-percent GDP growth in the October to December 2019 quarter was “unlikely.”
In a note to clients on Wednesday, ING Bank Manila senior economist Nicholas Antonio Mapa blamed the lingering effect of the interest rate increases in 2018 amid high inflation to last year’s capital formation.
Pernia said elevated inflation was the “spoiler” to 2018 economic growth, just as late budget approval hindered the Philippine economy to grow to its potential in 2019.
In a report also on Wednesday, the Asean+3 Macroeconomic and Research Office remained optimistic and kept its 2019 GDP growth forecast for the Philippines at 6 percent.
Among the 20 economists polled by the Inquirer, only seven projected full-year 2019 growth to reach 6 percent: Mapa, BDO Unibank Inc.’s Jonathan Ravelas, IHS Markit’s Rajiv Biswas, Maybank Investment Bank’s Suhaimi Bin Ilias, PNB’s Francisco Trinidad Jr., Security Bank’s Robert Dan Roces and RCBC’s Michael Ricafort.Eleven other economists expected 2019 GDP expansion at 5.9 percent: Ateneo de Manila University’s Alvin Ang, ATR Asset Management’s Ivan Ante, Bank of the Philippine Islands’ Emilio Neri Jr., Barclays’ Angela Hsieh, Capital Economics’ Alex Holmes and Union Bank’s Ruben Carlo Asuncion.
Five economists—Citibank’s Johanna Chua/Nalin Chutchotitham, HSBC’s Noelan Arbis, Moody’s Analytics’ Katrina Ell, Oxford Economics’ Thatchinamoorthy Krshnan, and Sun Life Financial’s Patrick Ella—shared the same forecast of 5.8-percent growth in
2019.