MANILA, Philippines (UPDATED) – With the year practically over, economists see Philippine economic growth falling below target. (READ: PH GDP grows 6% in Q3)
Although the expected surge in overseas Filipino workers (OFW) remittances, stronger infrastructure spending, as well as the coming holiday and elections spending are seen to further boost the gross domestic product (GDP) growth in the fourth quarter, the Philippines will have a hard time hitting 6% growth, some economists said.
Their remarks came a few minutes after the Philippine Statistics Authority (PSA) on Thursday, November 26, announced that the nation's GDP expanded 6% in the July-September quarter from a year earlier – higher than the revised 5.8% in the second quarter.
With 9-month growth at 5.6%, a 6% full-year growth is very much likely, given even better prospects for the last quarter, socio-economic planning chief Arsenio Balisacan said during a media briefing.
Balisacan said the country needs to grow by 6.9% in the fourth quarter to reach a full-year growth of 6%. (READ: Second half will be better - economists)
Even 6% is unlikely
But for Benjamin Diokno, University of the Philippines (UP) economist and former budget secretary, the 6% GDP growth for 2015 is even unlikely.
"For the first 3 quarters, GDP growth averaged 5.6%. Assuming the economy can grow by 6.9% in the fourth quarter – an assumption that is possible but not likely – then the full-year GDP growth would be 5.925%," Diokno said in a text message.
Diokno’s computation is slightly less than Balisacan’s 6% full-year GDP growth forecast. (READ: PH to miss 2015 GDP growth target - economists)
"Given the economy's performance in the first half of the year, I have forecasted that the economy would grow by 5.9%. With GDP growth of 6% in the third quarter, my forecast is still doable though highly improbable," Diokno added.
With the final quarter almost over, agriculture and exports are showing downward signs, retail sales are tepid, and government spending is still below program, Diokno said.
His remarks were echoed by Asian Institute of Management (AIM) economist Emmanuel Leyco, saying that even the 6% full-year growth estimate of the government is unachievable.
“The [third quarter growth of] 6% is good. I also think that 6.9% target for fourth quarter is unachievable, as services sector as a major driver already grew 7.3% – which may be difficult to exceed in the fourth quarter,” Leyco said in a text message.
Accounting for half of the country’s GDP, the services sector expanded 7.3% in the third quarter. The industry sector, meanwhile, gained 5.4% on year.