The country’s third-quarter economic growth likely settled below 6 percent amid lackluster domestic demand, a Philippine National Bank (PNB) economist said.
“We sense broad-based, mediocre demand remains entrenched in third quarter 2019 that’s likely to mirror third-quarter GDP (gross domestic product) growth of less than 6 percent,” PNB chief economist Jun Trinidad said in a report released on Monday.
He explained that “lethargic re-stocking among local producers coupled with easing capex (capital expenditure)-related expenditures for much of third-quarter 2019 was the likely hindrance to local demand-driven imports, e.g., capital goods.”
Citing latest government data, Trinidad noted that domestic demand-driven imports waned in August and slashed imports.
He said local demand-driven imports finally succumbed to weakness in August as overseas purchases of capital goods, fuel/lubricants and consumer goods contracted by 9.8 percent 11.9 percent, and 0.3 percent respectively.
Meanwhile, raw material imports posted the heftiest decline of 18.7 percent led by manufactured goods (-22.6 percent) primarily iron and steel imports, to suggest de-stocking in construction-related and in other materials, Trinidad added.
He also pointed out the lackluster imports of materials/accessories for the manufacture of electrical equipment (-15.9 percent), presumably for exports, further weakened total imports in August that fell by 11.8 percent year-on-year.
Trinidad’s third-quarter Philippine economic growth projection compares with the 5.5-percent GDP growth in the second quarter of 2019, and the 6 percent posted during the same quarter in 2018.
Economic growth stood at 5.5 percent in the first half of 2019, well below the government’s downwardly-revised target range of 6 to 7 percent.
The first-half GDP growth of 5.5 percent — the result of the slower-than-expected 5.6 percent and 5.5 percent GDP expansions in the first and second quarters, respectively — was attributed to lackluster state spending, which economic managers blamed on the delayed approval of the 2019 national budget.