The Philippine economy grew 6.2 percent in the July-to-September period, lifting the year-to-date growth to 5.8 percent, or just a little slower than the government’s full-year target of 6 percent to 7 percent.
Socioeconomic Planning Secretary Ernesto Pernia said the Philippines performed better in the third quarter of the year compared to other Asian countries.
“The Philippines likely ranked second behind Vietnam’s 7.3 percent but higher than China’s 6.0 percent, India’s expected Q3 growth of below 6.0 percent, and Indonesia’s 5.0 percent for the period,” Pernia said.
The economy now needs to expand by at least 6.7 percent in the final quarter of 2019 to reach the lower end of the government’s full-year growth target.
This, according to Pernia, is still doable, with the expected surge in private consumption for the holiday season, as well as the higher spending from the government and more investments from private firms.
“Yesterday, the Investment Coordination Committee-Cabinet level and the Committee on Infrastructure approved the updated list of infrastructure flagship projects of the Duterte administration, subject to further refinements. We deem that these projects are more feasible, responsive to medium and long-term demands and challenges towards uplifting the quality of life of the Filipino people, especially those being left behind. Thus, we call on our colleagues in the government, the private sector, partner international organizations, and the citizenry at large to work together to overcome hurdles and ensure that these projects get completed on time, or at least started substantially,” Pernia added.
He added: “For the remaining months of the year, the benign inflation outlook, and more upbeat consumer confidence, are expected to stimulate private consumption, especially with the nearing holiday season that has begun.”
“Meanwhile, the expansionary monetary policy stance of the government is expected to encourage private investments. The Central Bank has already cut its key policy rates by a cumulative 75 basis points this year. It has also lowered banks’ reserve requirement by a total of 400 bps – including the recent 100bps reduction for thrift banks effective December 2019.”
The agriculture sector is also expected to boost growth in the last quarter of the year, especially with the relatively favorable weather conditions providing the opportune time to ramp up agricultural production, particularly of high-value crops.
“We note that the upbeat performance of the agriculture sector, growing by 3.1 percent in the Q3 from 0.8 percent earlier this year, was driven by increased production of corn, coconut and pineapple. We urge the Department of Agriculture and other concerned agencies to swiftly implement the programs and projects under the Rice Competitiveness Enhancement Fund. Perhaps, among the priority projects should be the provision of mechanical dryers, particularly in areas where we lack “solar drying” facilities. As the harvest season is ongoing, the government should continue to directly buy palay from local producers affected by the unprecedented decline in farm gate prices to help curb their losses,” Pernia said.
To counter the risk of the spread of African Swine Fever, the government must continue to enforce its biosecurity measures. More stringent quarantine checkpoints, provision of disinfection facilities, and intensified anti-smuggling and meat inspection efforts are also needed, he added.
“As we can see, the Philippine economy has been steadily growing for the past three years. We expect to sustain this momentum in the following years and cement the Philippines’ standing as one of the fastest-growing economies in Asia,” Pernia said.