MANILA, Philippines — The head of the economic team of the Marcos administration is optimistic that overall growth in the last quarter of the year will remain strong even amid the continued rise in commodity prices.
Finance Secretary Benjamin Diokno said the latest economic indicators on jobs, manufacturing and the peso are pointing to a “sustained and strong” fourth quarter gross domestic product (GDP).
Diokno did not provide any GDP projection for the fourth quarter. The economy is coming from a surprising 7.6 percent GDP performance in the third quarter.
“The jobs market continues to improve, with the unemployment rate down to its lowest level in 17 years.Manufacturing output is rising and capacity utilization rate is improving,” Diokno told reporters.
“The peso has stabilized and is growing stronger, and oil prices are falling to near pre-Russian invasion of Ukraine levels,” he said.
For one, the unemployment rate in the country slid to 4.5 percent in October, its lowest level in 17 years.
Likewise, the underemployment rate or those looking for more hours of work went down to 14.2 percent as the average number of hours worked increased during the month.
Similarly, Diokno said the increase in factory output is encouraging, registering five straight months of growth at 5.1 percent in October.
“The manufacturing sector is recovering well. Almost one-fifth of firms operated at full capacity and some 40.4 percent operated at 70 to 80 percent capacity,” he said.
Further, oil prices fell to nearly the lowest level this year, pressured by concern about global recession. The price of Dubai crude oil dropped to $75.12 per barrel last Dec. 6.
On the foreign exchange, the peso appreciated further against the dollar on Wednesday to P55.45, up by 52.5 centavos from P55.975 the day before.
As the government banks on a strong fourth quarter with the peso appreciating and oil prices falling, Diokno said inflation would soon decline as well.
“In fact, even before all these positive signs, the Bangko Sentral ng Pilipinas projects inflation to average 5.8 percent this year, then slow down to the upper bound of the two to four percent target band in 2023, before it settles at the midpoint of the target band by 2024,” Diokno said.
“With the recent numbers, the likelihood that the BSP forecast, which was subsequently adopted by the Development Budget Coordination Committee, will be achieved is getting stronger,” he said.
Inflation rate hit its highest level in 14 years at eight percent in November.