The Philippine economy is expected to have grown by 6.3 percent to 7.3 percent in the third quarter of the year, driven by higher spending on infrastructure projects, according to the National Economic and Development Authority (NEDA).
“We have this forecast, this is based on quarterly data, the range is between 6.3 and 7.3 percent for the third quarter, Socioeconomic planning secretary and NEDA Director General Ernesto Pernia told reporters in a briefing on Thursday.
Third quarter gross domestic product (GDP) results will be released by the Philippine Statistics Authority on November 17.
The Philippine economy grew by 7 percent in the second quarter of the year, landing at the upper end of the 6 percent to 7 percent GDP growth target for the period.
Pernia noted the rise in infrastructure spending last September was a possible growth driver for the country’s economic growth, as well as a projected improvement in the agriculture sector.
“Agriculture, I think would have a better performance—negative yata second quarter—so it would be a smaller negative or possibly flat,” Pernia said.
The Agriculture sector output in the second quarter declined by 2.34 percent, mainly from the drop in the fisheries and crop sectors. In contrast, the cabinet official noted lower exports and foreign direct investments could’ve negatively impacted on the country’s economic growth in the third quarter.
“Wala na ‘yung effects nung election spending, and also exports remain soft—exports growth,” Pernia said.
Asked if President Duterte’s anti-US comments have had an impact on the third quarter GDP, Pernia noted that would likely affect the fourth quarter results since the comments were made toward in September. “But I don’t think the anti-US statements of the president will already be reflected in the Q3.”
He said the president’s tirades against the US started during the Asean Summit in Laos in September.
Pernia pointed out foreign direct investments from the US have been on a downtrend. “I think the FDI from the US has gone down—there are already reports—although China’s FDI is picking up,” he said.
However, the Cabinet official noted that FDIs from China have not yet overtaken the inflows from the US.
For the whole of 2016, Pernia expects a GDP growth of 6.5 percent to 6.6 percent. “So possibly around 6.5 to 6.6 should be achievable for the whole year,” Pernia said.
On the issue US business process outsourcing (BPO) companies withdrawing from the Philippines due to the anti-US comments of Duterte, Pernia noted it would likely not happen this year.
“BPOs, they’re not pulling out. I don’t think there will be a pullout of BPOs, except if Trump wins. But that will happen next year, I think. Because it’s profitable to private sector businesses. The US government cannot compel the private sector,” Pernia said.
Moving forward, should the investment from China and Japan push through, the Philippine economy would catch the windfall in 2017, Pernia noted.
“Well, if China comes through with its commitments, it will have a sizeable impact next year. And also from Japan, something like 19 billion—both government and private sector,” Pernia noted.
China’s investment pledges amounted to P16 billion, apart from P6 billion of official development assistance (ODA) and P3 billion of credit line from the Bank of China.
Pernia said the sectors that would likely benefit from the pledges are agriculture, infrastructure, energy and information and communications technology.