Philippines economy beat expectations to grow by 6.9 per cent in third quarter

The Philippines is now the second-fastest growing economy in Asia.
The Philippines is now the second-fastest growing economy in Asia.PHOTO: BLOOMBERG

MANILA - The Philippines economyclocked year-on-year growth of 6.9 per cent in the third quarter, on the back of robust expansion in the industrial and services sectors.

This made the Philippines the second-fastest growing economy in Asia, behind only Vietnam, which recorded 7.5 per cent in the third quarter, and ahead of China’s 6.8 per cent, and Indonesia’s 5.1 per cent.

"We are on track to meeting the full-year target range (of 6.5 to 7.5 per cent)," Economic Planning Secretary Ernesto Pernia said at a news briefing on Thursday (Nov 16).

The latest growth figure was better than expected - analysts had forecast third-quarter Philippine growth at 6.5 to 6.6 per cent.

But challenges remained as the year closes, with possible typhoons, a weak currency, and delays in President Rodrigo Duterte's ambitious US$180 billion (S$244 billion) infrastructure programme.

"Farmers will face risks due to weather disturbances. Damage of typhoons Paolo and Ramil might further slow down fishing and agricultural production next year," said Mr Pernia.

He added that rising oil prices, and higher electricity and water rates could also dampen consumer spending.

But those could be offset by an uptick in remittances from millions of Filipinos abroad, which could fuel consumer spending as the Christmas holiday season peaks.

The Philippines is among the fastest growing economies in Asia, expanding more than 6 per cent for nine consecutive quarters.

Industry grew 7.5 per cent, services by 7.1 per cent, and agriculture, 2.5 per cent, reversing declines in the second quarter.

Consumer spending, which makes up about 70 per cent of GDP (gross domestic product), grew 4.5 per cent from a year earlier, while government spending gained 8.3 per cent.

At the event, asked about the weaker peso, he said it works both ways.

"The weakening will always be beneficial to exports and remittances, as far as spending of remittances by households here is concerned. That's fine," he said.

"But the peso has been strengthening, weakening somewhat, then strengthening again. So, it's not really a worrisome development."