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Philippine economy expands by 6.9% in Q3, beating forecasts

Philippine economy expands by 6.9% in Q3, beating forecasts

The Philippine economy clocked solid growth in the third quarter, topping forecasts and expanding at its fastest pace in a year, supported by strong industrial output and services, the statistics agency said on Thursday.

Second quarter economic growth was actually a higher 6.7 percent instead of 6.5 percent, the Philippine Statistics Authority (PSA) announced on Wednesday ahead of today's release of third quarter results.

"With the country's projected population reaching 104.9 million in the third quarter of 2017, per capita GDP grew by 5.4 percent".

In the third quarter, the Industry sector expanded by 7.5 percent, higher than Services, which grew by 7.1 percent.

"On the demand side, or expenditure side, sustained recovery of public spending boosted growth during the quarter".

Pernia expects construction activities and public spending making a headway in line with the government's aim to spend 5.3 percent of GDP this year for infrastructure and up to 7.4 percent by 2022.

Growth in the first nine months averaged 6.7 percent, within the government's target range of 6.5 percent to 7.5 percent for the year.

However, the third quarter GDP was slower than the 7.1 percent recorded in the same period a year ago.

Five-alarm fire.
Pascal Le Segretain  Getty Images
Five-alarm fire. Pascal Le Segretain Getty Images

"It is welcome news that third-quarter economic expansion fell within the government's target, especially after an election year", Diokno said.

"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".

With household consumption posting a slower growth in the third quarter, inflation on the rise and a lackluster world exports market, University of Asia and the Pacific School of Economics Dean Cid Terosa said there is a need to turn to other possible sources of growth, such as investments.

To attract more investments, Pernia said the National Economic and Development Authority has already submitted to the Office of the President the revised Regular Foreign Investment Negative List (RFINL). "We are likely to see the economy steadily going on an upward trajectory", he said. "Damage of typhoons Paolo and Ramil might further slow down fishing and agricultural production next year", said Mr Pernia.

"That begins to be a concern if we are persistently growing above potential". Any delays in the government's ambitious infrastructure program also could pose risks.

"Not there yet", Espenilla told reporters in a text message, when asked if there's a risk of the Philippine economy overheating.

"We keep our 6.7 percent fourth-quarter GDP growth forecast and raise our full year forecast to 6.7 percent from 6.6 percent", Cuyegkeng said.