Philippine Growth Quickens Less Than Estimated; Peso Fallsby and
Government forecasts 6.9% growth in 4th quarter, 6% for 2015
Third-quarter government spending jumps 17.4% from year ago
Philippine economic growth accelerated less than analysts estimated last quarter, underscoring the external risks that policy makers are guarding against even as spending by households and the government climb. The peso fell.
Gross domestic product increased 6 percent in the three months through September, the Philippine Statistics Authority said in Manila Thursday. That compares with a median estimate of 6.3 percent in a Bloomberg survey of 21 analysts, and a 5.8 percent pace in the second quarter.
President Benigno Aquino’s economic team is counting on consumption and state spending to boost growth to 6.9 percent this quarter, as the outgoing leader seeks to strengthen his infrastructure legacy and boost the resilience of one of Asia’s fastest-growing economies. Quickening growth supports Bangko Sentral ng Pilipinas’ decision to refrain from joining neighbors including Singapore and Thailand in adding stimulus this year, with most economists forecasting it will hold its benchmark rate until the third quarter of 2016.
"Weak global demand will drag on GDP growth even as the domestic economy remains pretty solid," said Michael Wan, a Singapore-based economist at Credit Suisse Group AG. "Services, consumption are still very strong and the growth recovery momentum is intact. The central bank is likely to keep rates unchanged."
The peso, which sank to a six-year low this month, fell 0.2 percent to 47.05 per dollar as of 11:18 a.m. in Manila, according to prices from Bankers Association of the Philippines. The Philippine Stock Exchange index was little changed.
The economy grew 1.1 percent in the third quarter from the previous three-month period, when it expanded 2 percent.
Bangko Sentralheld its benchmark rate at 4 percent this month, and officials said they are keeping a watchful eye on global conditions, particularly an impending interest-rate increase by the U.S. Federal Reserve that could spur outflows and market volatility.
Click here to see how the different parts of the Philippine economy fared. Year-on-year growth last quarter was the fastest this year.