The economy surprised pundits by growing by 7.6 percent in the third quarter, faster than market expectations of 6.3 percent , sending nine-month gross domestic product (GDP) expansion by an average of 7.7 percent.
The Philippine Statistics Authority said net primary income from the rest of the world grew 94.6 percent, helping the country’s gross national income (GNI) to increase by 10 percent.
The economy was valued at P15.57 trillion, higher compared to last year’s P13.75 trillion.
On a seasonally adjusted basis, the economy grew 2.9 percent on a local output basis or GDP, while GNI grew 3.6 percent compared to the previous quarter.
National statistician Dennis Mapa said this is the sixth consecutive quarterly growth of the economy since posting 12 percent growth in the second quarter of last year.
This also puts the Philippines as the second fastest growing economy for the period next to Vietnam’s 13.7 percent; Indonesia trails behind Philippines at 5.7 percent, noted Socioeconomic Planning Secretary Arsenio Balisacan.
Of the country’s three major sectors, agriculture grew 2.2 percent, contributing 0.2 percentage points to the GDP growth, while the industry sector grew 5.8 percent and contributed 1.6 percentage points to the GDP growth.
The services sector, which employs the largest portion of the country’s workforce, grew 9.1 percent and contributed 5.8 percentage points to the GDP growth.
On a sub-sector basis, Mapa said the main contributors to third quarter growth were wholesale and retail trade; repair of motor vehicles and motorcycles, 9.1 percent; financial and insurance activities, 7.7 percent; and construction, 12.2 percent.
Per capita GDP growth was at 6.3 percent, equating to P46,960 worth of production for each Filipino for the period, up from last year’s P42,680.
On the demand side, household consumption and investment were the main drivers of growth.
Mapa reported household final consumption and expenditure, which measures household consumption, grew by 8 percent. Consumption amounted to 73.6 percent of the economy for the third quarter.
“This turnout signifies that Filipino families are close to returning to pre-pandemic life, as more people visit restaurants and hotels and engage in recreational activities within the country,” said Balisacan.
He added the growth largely benefitted from the further easing of mobility, including the resumption of face-to-face classes, which boosted consumption among Filipinos.
“The relaxation of border restrictions and more simplified travel protocols also supported the growth of local tourism and other sectors severely affected by the pandemic, leading to economic expansion in the third quarter,” Balisacan said.
Gross capital formation, which measures investments by the private sector, grew 21.7 percent.
Balisacan said the latest GDP figure gives the country momentum to exceed its 2022 growth targets of between 6.5 to 7.5 percent.
“You only require 3.3 percent growth in the fourth quarter to achieve the lower point of the range. Fourth quarter is usually the highest growth rate in a year. So we probably will grow higher than the one we targeted for the entire year,” he said.
Rising import costs, aggravated by a weaker peso, pushed inflation to a near 14-year high in October, cementing expectations of a sixth rate increase at the Bangko Sentral ng Pilipinas’ (BSP) meeting on November 17.
A 75-basis-point hike appeared to be in the bag after the BSP said last November 3 it will match the US Federal Reserve’s three-quarters of a percentage point rate rise to support the peso, which has so far lost 12.3 percent against the US dollar this year.
“Let me reiterate, however, that achieving economic growth is a necessary but not sufficient condition to achieve our greater goal, which is to reinvigorate job creation and reduce poverty. Ensuring that Filipino families have an adequate food supply is our top priority,” Balisacan said.
“Further, we present the country as a viable and sustainable destination to domestic and foreign investors. To support businesses, we are committed to creating a more enabling regulatory and investment climate. This commitment includes fully implementing landmark reforms such as the amendments to the Public Service Act, Foreign Investments Act, Retail Trade Liberalization Act, and the Corporate Recovery and Tax Incentives for Enterprises or the CREATE law,” he added. – Ruelle Castro
