Q3 GDP growth seen at more than 4%

RUPERTO P. MAJUCA: GDP for the third quarter may have grown higher than 4 percent.

The Philippine economy likely grew by over 4 percent in the third quarter of 2011, some of the country’s top economists said Wednesday.

Gross domestic product, or GDP, for the third quarter may have grown “higher than four percent” on robust growth in the services sector and the fast-tracking of government expenditure, National Economic and Development Authority (NEDA) assistant director-general for planning and policy Ruperto P. Majuca said in a phone interview.

Lower than anticipated inflation, “respectable” growth in remittances, real estate, banking and tourism also contributed to growth, he explained.

Simulation by the NEDA technical staff forecast year-on-year growth for the third quarter to be in the range of 3.8 percent to 4.8 percent, Majuca said.

Annual growth in the second quarter was 3.4 percent.

“It could even be a little bit higher, I feel, because of the leading economic indicators,” Majuca said. “The services sector will be the main driver for growth.”

The government trimmed its growth forecast to a range of 4.5 to 5.5 percent from 5-6 percent this year, but economists in a Reuters poll in October predicted growth would slow to 4.3 in 2011.

Before the simulation exercise, NEDA Director General Cayetano W. Paderanga Jr. had said in two interviews that third-quarter growth could be higher than four percent, mainly due to growth in the services sector.

Private economists were slightly more conservative with their outlook for the period at around 4 percent.

Midpoint GDP growth of 4.3 percent appears reasonable, Dr. Benjamin E. Diokno of the UP School of Economics said in a text message.

Diokno said agricultural production may be lower than first-semester expansion due to a series of typhoons, while the manufacturing sector may have contracted sharply as reflected in weak exports.

“Construction, especially public construction, might still be contracting as a result of government underspending. No PPP [public-private partnership] project has taken off. The catch-up plan has yet to gather momentum,” Diokno said.

Cid L. Terosa of the University of Asia and the Pacific also said that third-quarter GDP growth could reach 4 percent.

“It could be between 3.5 and 4 percent. It’s difficult for me to [give] a higher number,” he said.

Terosa noted that private investment and other investment inflows into industry and services could lift the economy up despite poor agriculture and exports showing,” Terosa added.—With a report from Reuters