Philippine economy grows 6.9% in last quarter

Nov. 21, 2017 – The Philippine economy grew at a faster than expected 6.9 per cent annual pace in the July to September 2017 quarter, helped by increased public spending on pay hikes for government personnel, officials said.

Economic Planning Secretary Ernesto Pernia described the growth reported as a “spectacular growth rate after an election year.” It surpassed a market consensus forecast of 6.6 per cent and was an improvement on 6.7 per cent growth in April to June.

President Rodrigo Duterte inherited a booming economy when he took office in May 2016. So far growth has remained on track, despite the country’s massive poverty, inequality and insurgencies.

Growth in July to September last year was 7.1 per cent.

Manufacturing output expanded 7.5 per cent from a year earlier, while public consumption rose 8.3 per cent thanks to increased pay and allowances for public employees, including the military, Pernia said.

“We are now seeing a sustained improvement in government spending in a run-up to our massive infrastructure program — the Build, Build, Build — which will continually unfold in the months ahead,” Pernia said. “This is expected to ratchet up public spending even further.”

Household consumption is also seen picking up in the last quarter due to the Christmas season, he added.

Pernia said the economy is on track to meet the government’s full-year growth target range of 6.5 to 7.5 per cent.

The Philippines has posted more than 6 per cent growth for nine consecutive quarters, making it among the fastest growing economies in the region.

Still, civil strife in the southern third of the country has taken a toll as seen in the dismal performance of the Philippine peso this year. Any delays in the government’s ambitious infrastructure program also could pose risks.