The Philippine economy is likely to grow at least 5 percent in the third quarter compared to the previous quarter, according to a market report.
“Because of the continuously strong industrial sector, decent national government spending and OFW remittances, strong growth in China and US and the easing euro-zone crisis, it has become more likely for GDP [gross domestic product] to reach a growth of at least 5 percent in the third quarter,” First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) said in its latest research note.
GDP is the total value of final goods and services produced in the country.
In the second quarter, the economy, as measured by GDP grew by only 3.4 percent.
During the first half of the year, the GDP expanded by 4 percent, much lower than the government’s target of 7 percent to 8 percent this year.
Socioeconomic Planning Secretary Cayetano Paderanga said the GDP in the third quarter is expected to grow faster than the previous quarter.
Paderanga attributed the growth to the improved government infrastructure spending and the strong services sector.
He, however, said that full-year growth may still hit the target of between 4.5 percent and 5.5 percent.
In spite of the negative annual growth rate of exports in the past few months, FMIC and UA&P said the year-to-date export growth remains positive at 0.8 percent.
“Despite the fact that 50 percent of Philippine exports are still purchased by the ASEAN and East Asia (excluding Japan), the huge decline due to the weakness in Europe and the US forces us to lower our full-year forecast to 3 percent to 5 percent, assuming a rebound in the fourth quarter,” FMICa and UA&P said.
FMIC and UA&P added that remittances would continue to be resilient in the last few months of the year due to seasonal factors.