Market experts laud Q3 GDP performance

MANILA, Philippines — President Marcos’ decision to reopen the economy proved to be the right step in boosting economic growth, as seen in the better-than-expected 7.6 percent gross domestic product (GDP) growth for the third quarter, according to analysts.

Japhet Tantiangco of Philstocks Financial said the reopening allowed for more business activities, which boosted growth.

“Overall, the fast growth we saw can be attributed to the current state of the economy, which is more open compared to the same period last year. With restrictions eased, we had a more robust flow of consumer and business activities, better confidence toward the economy, and progress in the labor market, all of which contributed to the strong growth,” Tantiangco said.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. has the same view.

He said the reopening of the economy and easing of mobility restrictions magnified any incremental growth such as the further pick-up in  both local and foreign tourism, continued growth in foreign direct investments, OFW remittances and BPO revenues, among others.

Ricafort said the end of lockdowns also led to higher sales, earnings and stronger valuations for some listed companies.

Jun Neri, lead economist at BPI, also noted that the reopening of face-to-face classes and improved access provided the most significant boost in the market, showing that households, in general, have been isolated from the effects of rapid interest rate hikes so far.

The 7.6-percent growth was driven by the demand side, of which the best performer has been investments as well as consumption, which remains as the biggest portion of the economy.

Tantiangco said sustaining the growth momentum could be difficult given the downside risks such as rising inflation and rising interest rates that cuts consumers’ purchasing power.

However, he noted that Marcos’ move to strengthen partnerships is good in attracting foreign investments to the country.

“So far, we have seen President Marcos strengthening ties with other countries, which in turn could lead to more foreign investments. If these foreign investments materialize, then it will help strengthen our capital formation base and create more job opportunities, which in turn can help in our medium to long term economic growth,” Tantiangco said.