The Philippine economy grew 6.9% in the third quarter of 2017, one of the highest in Asia and faster than the projected growth for the period.
Socioeconomic Planning Secretary Ernesto Pernia, in a statement, said third-quarter gross domestic product growth is second highest in Asia next only to Vietnam’s 7.5% and ahead of China’s 6.8% and Indonesia’s 5.1%.
The 6.9% growth was also higher than the upwardly revised 6.7% in the second quarter of 2017 and surpassed the estimated 6.5% to 6.7% by market analysts. The third-quarter GDP, however, was slower than the 7.1% recorded in the same period in 2016.
With a year-to-date growth average at 6.7%, Pernia, who also heads the National Economic and Development Authority (NEDA), said “we are confident that we are on track in meeting the full-year target range of 6.5 to 7.5% GDP growth for full-year 2017.”
The country’s growth performance for the third quarter is attributed to sustained strong growth in exports and improvements in public spending, which then boosted the manufacturing subsector and the services sector.
On the demand or expenditure side, sustained recovery in public spending pushed growth during the quarter.
Public consumption was up by 8.3% on account of higher spending on personnel services with the raise in base pay of civilian government employees and allowances of military and uniformed personnel, as well as the filling-up and creation of positions at the education department.
“We are now seeing a sustained improvement in government spending in a run-up to our massive infrastructure program—the Build, Build, Build—which will continually unfold in the months ahead. This is expected to ratchet up public spending even further,” the Cabinet official said.
Construction activities and public spending are making headway in line with the government’s aim to spend 5.3% of GDP this year for infrastructure and as high as 7.4% by 2022, Pernia said.
A pick-up in household consumption in the last quarter of the year due to the holiday season is also expected.
“Imagine if both public and private spending are both on a roll. We are likely to see the economy steadily going on an upward trajectory,” he noted.
To keep the country’s growth momentum, Pernia said the government is working hard in fast-tracking the implementation of the Build Build Build program.
With private construction exhibiting a downtrend for two consecutive quarters, the government’s infrastructure program is expected to open more opportunities for the private sector to expand business activities and increase capital spending.
Pernia noted that the reported figures “show that the country’s economic activities remain robust.”
“It demonstrates that we are on course in reaching our overarching goals of building an economy that serves everyone and leaves no one behind,” he added.
Pernia said remittances went up in the third quarter and that there is nothing to worry about foreign direct investments as it is expected to match last year’s as more investments are expected to come in.
Usual risks in the outlook are weather disturbances such as typhoons that come in late in the year.
NEDA assistant secretary Carlos Bernardo Abad Santos said other risks in the outlook include upward price pressures from oil prices.
