PHL's Q3 GDP to exceed 6 percent —FMIC, UA&P

The Philippines' economic growth as measured by gross domestic product (GDP) is likely to exceed 6 percent in the third quarter of 2018, First Metro Investment Corp. and the University of Asia and the Pacific said in a report on Tuesday.

"The economy likely expanded faster in Q3 than the 6 percent posted for Q2, as red-hot investment spending and robust manufacturing sector stepped up on the accelerator," FMIC and UA&P said in its "Market Call" research paper.

The economy grew slower by 6.0 percent in the second quarter of 2018 partly due to policy decisions undertaken that are expected to promote sustainable and resilient development. 

"The economy still looked healthy as most indicators released proved robust," FMIC and UA&P said.

"Investment spending continued to catapult the economy buoyed by private investments (capital goods imports rising by 39 percent) and public investments (national government sustained a 29 percent growth pace in August)," it said.

FMIC and UA&P also noted that exports should contribute to the demand side as it eked out its third consecutive month of growth in August.

Overseas Filipino workers' remittances, which grew 5 percent in July, more than offset the fall in June, they said.

"Inflation continued to batter consumers as it rose faster to 6.7 percent year-on-year in September from 6.4 percent a month ago. Nonetheless, the BSP’s (Bangko Sentral ng Pilipinas) tightening moves, including another 50-basis point policy rate rise late last month have been cooling money growth and probably inflation expectations as well," FMIC and UA&P said.

"We think that BSP would raise policy rates by a maximum of 25 bps before the end of 2018, despite falling rice, food and oil prices, since bus and jeepney fares are supposed to rise by November," it added.

The Philippine Statistics Authority is scheduled to released the third quarter GDP data on November 8. —KG, GMA News