By Neil Jerome Morales and Mikhail Flores
MANILA (Reuters) – The Philippine economy rebounded strongly in the third quarter, supported by a recovery in government spending and making this year’s growth target of 6%-7% “doable”, the economic planning secretary said on Thursday.
Gross domestic product (GDP) rose 5.9% in the September quarter from last year, surpassing the 4.7% forecast in a Reuters poll, helped by a turnaround in government spending that grew 6.7%, reversing the previous quarter’s 0.7% decline.
“We hope to maintain this momentum for the remainder of the year and the years to come,” Economic Planning Secretary Arsenio Balisacan told a media briefing.
The third-quarter put growth for the January to September period at 5.5%, less than the government’s 6%-7% target for 2023. Even so, Balisacan said the goal was “still doable” and “within reach”.
On a quarter-on-quarter basis, GDP expanded 3.3%, better than economists’ expectations of 2.0% growth and the previous quarter’s 0.9% contraction.
Balisacan said inflation remained a challenge as it dampened household consumption, which grew at a slower pace of 5.0% in the July to September period from 5.5% in the second quarter.
“We emphasize that non-monetary measures to protect the purchasing power of Filipinos remain crucial as we address the issue of high inflation,” Balisacan said.
Annual inflation slowed for the first time in three months in October, to 4.9% from 6.1% the previous month, but with risks to the inflation outlook on the upside, the central bank has said it was ready to take further policy action to tame prices.
The central bank, which on Oct. 26 delivered an off-cycle 25 basis point interest rate increase, will meet on Nov. 16 to review policy.
(Writing by Karen Lema; editing by Robert Birsel)
