NEDA expects good results in Q3

Tokyo, Japan – Third quarter economic growth in the Philippines likely tracked the trend in the first half due to the services sector and robust consumption, the country’s chief economist said.

“We are hopeful that it is on the same track,” National Economic and Development Authority (NEDA) Director General Arsenio Balisacan told The STAR on the sidelines of the International Monetary Fund-World Bank Annual Meetings here.

The government is not revising its full-year forecast amid a sudden decline in exports, he added.

“[The growth] is probably broad-based,” Balisacan said, adding that the services sector remains the biggest driver of the economy.

The country’s gross domestic product expanded 5.9 percent in the second quarter, bringing the first half uptick to 6.1 percent, one of the best performances in Asia.

“On the consumption side, remittances continue to be robust,” Balisacan said.

Private construction and public spending are also on the rise, he said.

The property sector is in a rapid expansion mode given large demand from the housing backlog and the increase in the middle income population.

Budget deficit hit P71.208 billion in January to August, still way below the full-year shortfall ceiling of P279 billion, putting the government in a “fiscal sweet spot” to spend more.

Balisacan also said he hopes that the farm sector performed well amid the monsoon rains in August.

For the entire year, the government will not revise its growth assumptions despite an expected failure to hit growth targets for exports.

“We are not changing our earlier assumptions of [reaching the] upper end of the range of five to six percent for the full year,” Balisacan said.

Merchandise exports took a dive in August, decreasing nine percent to $3.8 billion from $4.17 billion a year ago.

In the eight months ending August, the value of exports reached $35.28 billion, up 5.4 percent from last year’s $33.48 billion but risking the 10-percent growth targeted by the government.

Balisacan said the global slowdown stymied a robust growth in exports.

But still, Philippine exports grew 5.4 percent despite the contraction in semiconductors, which accounts for roughly a third of outward shipments. –Neil Jerome C. Morales (The Philippine Star)