BY DARWIN G. AMOJELAR SENIOR REPORTER

THE Philippine economy likely grew at a faster pace in the third quarter, propped up by a strong services sector and remittances from overseas Filipino workers (OFWs), the National Economic and Development Authority (NEDA) said Thursday.

Acting Socioeconomic Planning Secretary and NEDA Director General August Santos said the economy, as measured by the country’s gross domestic product (GDP), may have grown between 1.6 percent and 2.6 percent in the three month period ended September.

An indicator of economic performance, GDP is the amount of final goods and services produced in the
country.

The National Statistical Coordination Board (NSCB) will announce the official GDP figures on November 26.
Santos said growth mainly came from the services and agriculture sectors.

He said that the industry sector recorded a slight contraction because of the global financial crisis.
Given the latest projection, “We’re on track to meet achieve the full year growth target,” the NEDA chief said.

The government expects a GDP growth of between 0.8 percent and 1.8 percent this year.
In the first half of the year, the economy grew by 1 percent.

Santos said the services sector and OFW money offset the impact of typhoons Pepeng and Ondoy.
The NEDA earlier said the two typhoons may have cut GDP growth by 0.2 percentage points to between 0.6 percent and 1.6 percent this year.

More growth in fourth quarter

Santos said the government sees “more growth in the fourth quarter because of the Christmas spending and early election spending.”

Data from the Bangko Sentral ng Pilipinas showed that money sent home by OFWs increased by 8.6 percent year-on-year to $1.446 billion in September.

This caused remittances, which contribute 10 percent to GDP, to grow by 4.2 percent to $12.8 billion in the first nine months of this year.

With the September remittance data, “Definitely, we can reach more than 5- percent growth this year,” Santos said.

In a separate report, Goldman Sachs said remittances by OFWs are likely to grow by 11 percent in December.

“We expect growth in overseas remittances to accelerate over the next few months and reach 11 percent year-on-year by December, as a lagged response to improving global growth conditions, an uptick in oil prices improving the macro environment in the Middle East, and the Christmas season inflows acting as a catalyst,” the US-based bank said.

It said the robust remittance inflows would support the peso in the next 12 months, adding the local currency is likely to hit 44.5 against the dollar.
WITH REPORT FROM MARICEL E. BURGONIO