MANILA, Philippines — The economy grew at a slightly faster pace in the second quarter than initially reported, as revisions were made in three sectors, according to the Philippine Statistics Authority (PSA).
The second quarter gross domestic product (GDP) growth rate was revised upward to 2.4 percent from the preliminary estimate of 2.3 percent.
Major contributors to the upward revision were wholesale and retail trade including repair of motor vehicles and motorcycles (revised to 4.7 percent from 4.6 percent); agriculture, forestry and fishing (2.9 percent from 2.7 percent) and transportation and storage (4.1 percent from 3.8 percent).
While the second quarter GDP growth rate was revised, average growth in the first half remained at 2.6 percent.
Average growth in the first half is lower than the 3.5 to 4.5 percent growth target set by the government for the year.
Meanwhile, Net Primary Income from the Rest of the World was revised downward to 0.8 percent from one percent.
The gross national income in the second quarter was kept at 2.2 percent.
Revisions to the GDP estimates are made based on the statistics agency’s revision policy, PSA Board Resolution 1, Series of 2017-053.
PSA said this “is consistent with international standard practices on national accounts revisions.”
Data on third quarter economic performance will be released tomorrow.
Meanwhile, the University of Asia and the Pacific (UA&P) said the country’s GDP expansion further slowed down to around two percent in the third quarter.
“We see subdued Q3 GDP (gross domestic product) growth hovering around two percent on the back of sticky oil prices and slow NG (national government) spending,” UA&P said in The Market Call Capital Markets Research report for October.
However, UA&P said GDP growth is set to rebound this quarter.
“This anticipated momentum will be driven by seasonal Christmas spending, robust peso-denominated OFW (overseas Filipino workers) remittance, accelerated year-end infrastructure disbursements, favorable weather conditions and targeted Pag-IBIG loan allocations to clear developer inventories in Metro Manila,” it said.
In terms of employment, UA&P said it expects moderate growth for the rest of the year as the weather improves and businesses prepare for the busy holiday shopping season.
Despite the expected rebound in economic performance, UA&P said that inflation remains a significant headwind that may limit economic growth.
UA&P expects inflation to average eight percent in the fourth quarter.
It said that the strong El Niño season may drive another round of faster inflation next year.
Amid the threat posed by El Niño, UA&P said that the Bangko Sentral ng Pilipinas (BSP) may deliver another 25-basis-point rate hike in December.
At its meeting last month, the BSP raised the benchmark interest rate by 50 basis points to 5.50 percent.