ROBUST private and public spending, as well as increased exports, likely caused the Philippine economy to rise by more than 6 percent in the third quarter of 2018, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in a joint report on Tuesday.
In its latest issue of “The Market Call,” FMIC and UA&P said the “economy likely expanded faster in Q3 (third quarter) than the 6 percent posted for Q2 (second quarter), as red-hot investment spending and robust manufacturing sector stepped up on the accelerator.”
The “country’s investment-led story remains solid” as imports of capital goods rose by 39 percent year-on-year in July, much faster than June’s 30-percent expansion, it added.
The report’s authors also suggested that government spending “added fuel to growth” with a 28.7-percent uptick in August, likely driven by infrastructure and capital outlays, which grew by 70.5 percent in the month.
“We have indicated our view that growth in Q3 will be supported by strong investments, especially with the [Duterte] administration’s unrelenting effort to push for faster completion and faster delivery of the ‘Build Build Build’ projects they have lined up,” they added, referring to the government’s massive infrastructure program.
FMIC and UA&P, meanwhile, underscored a “more robust” growth in exports in the third quarter.
They emphasized that the Philippines’ export performance bucked the previous lackluster trend, recording its second monthly gain at the start of the quarter.
Exports increased by 0.3 percent year-on-year to $5.8 billion in July, following the 2.8 percent gain in June. Outbound shipments declined from January until May.
GDP growth fell below expectations in the second quarter at 6.0 percent, bringing first-half expansion to an average of 6.3 percent, lower than the government’s revised 6.5-6.9 percent target.
(M.U. Caraballo, TMT)