DOF sees economy picking up growth pace in fourth quarter

MANILA, Philippines — The country’s economic growth may pick up pace in the fourth quarter on the back of higher investments and consumption, fuelled by easing inflation, as well as holiday and election spending, an official of the Department of Finance (DOF) said.

In an interview, Finance Undersecretary and chief economist Gil Beltran said the country’s fourth quarter gross domestic product (GDP) growth would likely be higher than what has been recorded in the first three quarters.

“It will be better, better than the first three quarters,” Beltran told reporters.

Beltran said economic expansion in the fourth quarter may be driven by private investments, with foreign direct investment (FDI) inflows seen to sustain growth momentum despite interest rate hikes.  

The official also noted that consumption may rebound in the fourth quarter with the price of food items already starting to normalize.

Consumption and investment, he said, may also be boosted by holiday and election spending in the fourth quarter.

“There’s a lot of spending for consumption and for investment. And the inflation fever is starting to heat up. Remember that during election period, GDP rises more than one percent,” Beltran said.

However, Beltran admitted it would be challenging for the government to achieve its revised GDP growth target of 6.5 to 6.9 percent for the whole of 2018.

“It will be a little difficult, but it’s not impossible,” he said.

The economy grew by 6.1 percent in the third quarter, slower than the revised second quarter figure of 6.2 percent.

To achieve the lower end of the revised target, the economy needs to expand by at least seven percent in the fourth quarter.

Beltran, in his latest economic bulletin, said economic expansion in the third quarter was driven by investments, with its share to GDP rising to 26 percent in the first three quarters from 23.6 percent during the same period last year.

He said investments grew by 16.7 percent, while construction improved by 16.1 percent.

The undersecretary also noted that the services sector, which remained largely steady at 6.9 percent, and exports, which increased by 14.3 percent despite global uncertainties, also supported growth.