Philippine GDP grows slower at 6.1% in Q3

The Philippine gross domestic product (GDP) grew at a slower pace of 6.1 percent in the third quarter, compared with the previous quarter and the same comparable period in 2017, the Philippine Statistics Authority (PSA) reported on Thursday.

The third quarter GDP compares with the revised 7 percent in the third quarter of 2017, and the revised 6.2 percent in the second quarter of 2018.

“Among the major economic sectors, Services recorded the fastest growth at 6.9 percent, followed by Industry with a growth of 6.2 percent. On the other hand, Agriculture declined by 0.4 percent,” the PSA said.

“With the country’s projected population reaching 106.6 million in the third quarter of 2018, per capita GDP grew by 4.4 percent,” the PSA added.

GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, according to Investopedia.

‘Still respectable’

Socioeconomic Planning Secretary Ernesto Pernia said the third quarter GDP is still “respectable.”

“We are not exactly exuberant about the 6.1 percent growth rate, but still comforted that we remain one of the fastest-growing economies in Asia, next to Vietnam at 7.0 percent, China at 6.5 percent, and way ahead of Indonesia at 5.2 percent,” he said.

“The reason for the slowdown is the slowdown in household consumption—household consumption on food and other basic products,” Pernia noted.

Household final consumption demand grew slower at 5.2 percent in the third quarter from 5.9 percent the previous quarter, the slowest since it registered at 5.0 percent in the third quarter of 2014.

Household spending on food grew by only 2.8 percent in the third quarter from 6.2 percent in the previous three months.

Pernia noted that consumption may have been dampened by high prices as inflation soared to 6.2 percent in July to September.

“With high prices, the demand tends to be dampened. Especially food prices remain to be elevated,” he explained, adding that if not for the high inflation, growth would have been within the 6.5 to 7.0-percent range.

Pernia, however, expects consumption to pick up in the last three months of 2018, with the holidays as the seasonal growth driver.

“Going by previous years’ fourth-quarter consumption, spending normally picks up quite a bit,” he said.

In January to September, GDP registered at 6.3 percent—slower than the 6.8 percent in the first nine months of 2017.

“With this, the Philippines needs to expand by at least 7.0 percent in the fourth quarter to attain the low-end of the government’s target of 6.5 to 6.9 percent ... for the whole of 2018,” Pernia said.

The government in October revised downward the economic growth target from 7.0 to 8.0 percent.

PHL stocks 

Share prices on the Philippine Stock Exchange faltered during the morning session as the third quarter gross domestic product (GDP) fell below expectations.

The market’s median estimate placed the third quarter GDP growth at 6.2 percent, said Regina Capital Development Corp. head of sales Luis Limlingan.

As of 10:02 a.m., the benchmark PSEi slipped by 74.88 points or 1.07 percent to 6,959.05. The broader All Shares lost 46.58 points or 1.08 percent at 4,252.34.

“GDP coming in below estimates are keeping investors on the sidelines,” Eagle Equities Inc. research analyst Chris Mangun said.

Presidential spokesperson Salvador Panelo left it up to the economic managers say something about GDP report, noting the “situation is improving” as inflation was the same at 6.7 percent in October compared with September.

“As explained by the Department of Finance and other economic managers, the situation is improving,” he said.

“The inflation rate plateaued and there is no other way but down, given the fact that the government has undertaken measures to neutralize inflation rate like flooding our country with food supplies, rice and others,” he told reporters in Malacañang. 

“And if you have noticed, prices have started to come down,” Panelo said. —With a report from Virgil Lopez/VDS/RSJ, GMA News