The Philippine economy expanded at a faster-than-expected pace in the third quarter on household consumption and investment, official data revealed Thursday.
Gross domestic product logged an annual expansion of 7.6 percent after rising 7.5 percent a quarter ago, the Philippine Statistics Authority said.
The pace of growth was forecast to ease to 6.3 percent. Moreover, this was the sixth straight quarter of expansion.
The economy grew 2.9 percent sequentially in the third quarter, in contrast to the 0.1 percent fall in the second quarter. The sequential growth also exceeded economists’ expectations of 1.0 percent.
The economy is on track to achieve government’s growth target 6.5 percent – 7.5 percent this year, Socioeconomic Planning Secretary Arsenio Balisacan told reporters.
However, Balisacan said the economy faces ‘considerable burden’ in the form of high inflation.
Inflation hit a near 14-year high of 7.7 percent in October, adding pressure on the central bank to lift the rate again on November 17. The Bangko Sentral Ng Pilipinas has lifted the policy rates five times so far this year.
Although the economy rebounded sharply in the third quarter of the year, growth is expected to slow over the coming months as high inflation, rising interest rates and weaker global demand weigh on prospects, Capital Economics economist Gareth Leather, said.
The economist forecast growth to slow from 7 percent this year to just 5.0 percent next year. The consensus for next year is for growth of 5.5 percent.
The expenditure-side breakdown showed that household spending and investment contributed to the annual GDP growth in the third quarter. Household consumption advanced 8.0 percent despite soaring inflation.
Gross capital formation surged 21.7 percent, while government spending gained only 0.8 percent.
Exports and imports of goods and services climbed 13.1 percent and 17.3 percent, respectively.
On the production-side, services output surged 9.1 percent and industry grew 5.8 percent. At the same time, farm output expanded only 2.2 percent.
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