Philippine financial system beat expectations to develop 6.2% within the third quarter
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Gross home product within the July-September quarter grew 6.2% from a yr earlier, the statistics company mentioned on Thursday, exceeding the 6.0% median forecast in a Reuters ballot. That in contrast with 5.5% development within the prior quarter.
On a seasonally-adjusted foundation, the financial system grew 1.6% within the third quarter.
An anticipated pick-up in authorities spending, slowing inflation, a rebound in farm output mixed to elevate third quarter development.
The Philippines stays one of many fastest-growing economies in Asia, however rising uncertainties, together with ongoing U.S.-Sino commerce tensions, had put this yr’s 6-7% development goal in danger.
Financial Planning Secretary Ernesto Pernia mentioned the financial system would wish to broaden by no less than 6.7% within the remaining quarter to satisfy no less than the underside finish of the expansion objective.
The expansion rebound, nevertheless, might not be sustained.
“We do not assume Q3’s robust figures mark the beginning of a sustained rebound. On the plus facet, consumption ought to proceed to develop at an honest charge, helped partly by a pointy slowdown in inflation, which can have boosted shoppers’ buying energy,” mentioned Alex Holmes, Asia economist at Capital Economics, mentioned in a analysis observe.
Expenditures had been up 39% in September from final yr, however extra must be executed as spending within the 9 months ended September fell 2.1% wanting the federal government’s program.
Slowing inflation, which has allowed the central financial institution to reverse a few of final yr’s coverage tightening, ought to bode properly for home demand and assist drive development within the second half of the yr, Pernia instructed a media briefing.
The central financial institution slashed its benchmark rate of interest thrice this yr by a complete of 75 foundation factors to 4.0% and decreased the reserve requirement ratio (RRR) by 400 foundation factors to 14%.
Central financial institution Governor Benjamin Diokno has mentioned there will probably be no extra financial coverage and RRR cuts for the yr, and that the central financial institution will assessment financial circumstances subsequent yr.
Capital Economics expects one other 50 foundation factors of charge cuts for subsequent yr.
The central financial institution has two extra coverage conferences this yr, one on Nov. 14 and the following on Dec. 12.