MANILA -- Economic think tanks are betting that the Philippine economy expanded more than 6 percent in the third quarter of the current year, largely driven by robust investment spending and modestly rebounding exports.
“The outlooks from the demand side --investments and exports-- still look positive while slowing manufacturing and commodity prices rising at a faster pace cloud this view,” First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said Tuesday.
In a joint report, The Market Call, the FMIC and UA&P noted that investments in capital goods “appear firmly on an elevated path”, while exports should add to its second consecutive monthly growth in July, with the help of United States and European Union economic expansions.
The FMIC and UA&P believe the strength of the economy depends on investment and government spending while there may be slight weakness in consumer spending due to higher inflation. “However, this may be compensated by more robust growth in exports in third quarter,” they said.
The FMIC and UA&P expect a possibility of a further policy rate increase in the fourth quarter should inflation rise even faster. “We, however, think it has peaked in September, and so remain a bit sanguine about GDP (gross domestic product) growth in third quarter which should improve on second quarter,” they added, noting food supply normalizes in October.
The report further said the manufacturing output also remains robust, albeit showing a slowdown from the first quarter. “Even more solid, NG (national government) keeps ramping up infrastructure and capital outlays without let up,” it said.
The Philippine Statistics Authority (PSA) is scheduled to release the third-quarter GDP results on November 8.
The economy grew by 6 percent in the second quarter. (PNA)
