MANILA – The Philippine economy grew by 5.9 percent in the third quarter of the year, the highest recorded so far among the major emerging economies in Asia that released their growth data during the period.
In a press briefing on Thursday, National Statistician Dennis Mapa said the gross domestic product (GDP) expansion during the period was higher than the 4.3 percent growth recorded in the second quarter of the year.
This is lower, however, than the 7.7 percent growth seen in the third quarter of 2022.
Compared to other emerging economies in Asia, the Philippine economic growth outpaced that of Vietnam (5.3 percent), Indonesia and China at 4.9 percent, and Malaysia (3.3 percent).
Year-to-date, economic growth settled at 5.5 percent.
During the briefing, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the "Philippine economy continues to grow despite several major headwinds that we have experienced and continue to experience."
However, Balisacan said the economy will need to grow by at least 7.2 percent in the fourth quarter of the year to attain the low-end of the government's 6 to 7 percent growth target for 2023.
During the third quarter, all major economic sectors, which include agriculture, industry and services, posted positive growths in the second quarter of 2023, with 0.9 percent, 5.5 percent and 6.8 percent, respectively.
On the demand side, household final consumption expenditure slowed to 5 percent from 8 percent last year, which Balisacan attributed to the elevated inflation.
Exports of goods and services grew by 2.6 percent, while imports contracted by 1.3 percent.
Government final consumption expenditure accelerated to 6.7 percent, while gross capital formation declined by 1.6 percent.
"The acceleration of public spending in the third quarter is notable, tempering the decline of overall gross capital formation," Balisacan said.
Growth target still achievable
Balisacan said that while year-to-date growth is still below the government's target, the low-end of the 6 to 7 percent target can still be achieved.
"It's still doable, still within range, but of course the challenges are there particularly the continued external factors, the threats that come from these geopolitical tensions and of course, the domestic inflation that we are facing," he said.
Inflation, which already decelerated to 4.9 percent in October this year, is still above the government's 2 to 4 percent target.
Despite this, Balisacan is optimistic that as inflation eases, economic growth will also accelerate.
"And so as we make progress, and I believe that as we get inflation down, we would be able to significantly improve economic performance, because you know, the inflation is a major factor contributing to the slowdown of household consumption," he said.
"For example, as we noted, the domestic demand slowed down quite significantly, particularly household consumption and that's primarily because of the uptick in inflation. Now that we are succeeding in reducing that inflation, we believe that the consumption expenditures, domestic demand will improve this quarter and [in] the coming quarters ahead," he added.
Balisacan said public spending is also expected to boost growth in the fourth quarter of the year.
"We have progressed quite a lot in the third quarter insofar as public spending is concerned. There's still so much room for improving the spending and we can count on that, as we have seen more than one-third of the growth observed in the third quarter was coming from the government spending. So we'll count on that," he said.
Moving forward, Balisacan said that on the instruction of the President, the government will provide much-needed support for agricultural production in the provinces that will still be able to grow food during the worst of El Niño.
The government will also provide emergency employment opportunities for farmers in provinces who cannot produce during this period.
Balisacan said the government will continue to leverage the full implementation of liberalization reforms to intensify investment promotion in the country and boost growth.
"Moreover, we remain committed to fully implementing the strategies and the transformation agenda outlined in the Philippine Development Plan 2023-2028. The government is currently assessing our progress concerning the target outcomes and the strategies identified in the PDP," he said. (PNA)