The economy likely sustained its expansion in the third quarter, a Cabinet official said, given a slew of favorable indicators.
“Expectations are very positive in business confidence, consumer confidence, interest rates are very low, inflation continues to be low … that should all be a boost for domestic consumption,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters earlier this week.
The central bank’s latest Business Expectations Survey (BES) was positive for the third quarter, with the overall business confidence index (CI) at 41.4 percent.
Its separate Consumer Expectations Survey (CES), meanwhile, noted that Filipino consumers were likely to boost household spending in the third quarter due to more job opportunities, higher family earnings and reduced debts.
Although still negative, the overall consumer CI improved to minus 11.6 percent from the minus 16.2 percent recorded in the second quarter.
Interest rates remain stable, with the central bank’s benchmark overnight borrowing and lending rates remaining at 4 percent and 6 percent, respectively.
Inflation, lastly, fell to an all-time low of 0.4 percent in September from 0.6 percent in August.
“We’re not seeing a slowdown of investment. I hope the private investment will continue to be quite high, quite robust,” the National Economic and Development Authority (NEDA) chief said.
Balisacan also cited a bounce back in manufacturing volumes in August after three months of decline.
Factory output as measured by the volume of production index (VoPI) rose 3.7 percent year-on-year in August.
Finally, Balisacan said services exports have stayed “robust” even as merchandise exports remain in a slump.
“Export in services are quite robust. Its a good thing we have exports in services which are growing rapidly,” he said.
“I think those are additional factors that have contributed to the resiliency of the economy,” he added.
Merchandise exports dropped for a fifth consecutive month in August, falling by sharp 6.28 percent year-on-year to $5.12 billion on the back of double-digit declines for major commodities.
GDP growth accelerated to 5.6 percent in the second quarter from the revised 5 percent seen in the first three months of the year. First half growth, however, was slower at 5.3 percent compared to 6.2 percent in the same period last year.
The government has a 7 percent to 8 percent GDP growth target this year. Balisacan has said
In the first half of 2015, the Philippine economy grew by 5.3 percent, slower than the year-earlier 6.2 percent, falling short of the government’s target range of 7 percent to 8 percent for 2015.
Third quarter GDP results are scheduled to be released next month.