The Philippine economy likely expanded 6.1 percent in the fourth quarter of 2014, a significant recovery from slow growth seen a quarter earlier, Moody’s Analytics said in its latest weekly report.
The fourth-quarter estimate for Philippine gross domestic product (GDP) by the unit of Moody’s Corp. indicated a rebound from the slowdown in expansion recorded in the third quarter at 5.3 percent.
The third-quarter GDP rate had dragged the economy’s year-to-date improvement to 5.8 percent, or below the government’s 6.5 percent to 7.5 percent target for 2014.
“A fall in agricultural production and a decline in government spending dragged third- quarter GDP growth to its slowest pace in three years,” Moody’s Analytics said in the report.
During the quarter, the agriculture, fishery and forestry sector contracted by 2.7 percent, while the government’s final consumption expenditure dropped 2.6 percent.
However, Moody’s Analytics remained optimistic that such negative contributors to growth would bounce back in the fourth quarter.
“These factors should be transitory, and we expect economic growth to rebound in the fourth quarter . . . ” it said.
The agency said business sentiment and investment in the Philippines remained buoyant and should make solid contribution to growth.
“Consumer demand accounts for 70 percent of GDP and will continue to grow at around 5 percent year-on-year,” it said.
The Philippine Statistics Authority (PSA) is scheduled to release the official fourth quarter GDP and full-year 2014 growth figures on January 29.
The latest Moody’s Analytics forecast is part of its Asia Pacific Preview report, which provides a summary of major economic data due out this week in the Asia Pacific region.
Moody’s Analytics provides expertise in economic and consumer credit analysis, credit research and risk measurement, enterprise risk management and structured analytics and valuation.