7% growth possible in Q4

While considering the at least 6.7 percent economic expansion in the fourth quarter a tall order, growth at a faster rate is possible.

This was learned from Socioeconomic Planning Secretary Ernesto Pernia whose forecast local output, measured as the gross domestic product (GDP), ranges from 6.5 percent to 7 percent in the last quarter 2019.

According to him, with the holiday season fast coming up, government consumption, which has proven to support GDP growth in earlier quarters, should persist in the months ahead, supported by the sustained decline in inflation.

Earlier, Pernia said given the 6.2 percent GDP expansion in the third quarter, maintaining the performance and boosting momentum is “very achievable,” allowing growth to hit at least 6.7 percent in the last quarter. Such a strong finish will then cement the government’s low-end growth target of 6 percent for 2019.

“(High growth is) very achievable. We have seen the economy surging and it will continue. Surging by 5 percentage points should be easy,” Pernia said.

While the economic officials recently expressed confidence in achieving the 6 to 7 percent growth target, private sector forecasts bare a mixed outlook, with some keeping their previous forecasts of a sub-6 percent growth print for the year.

Security Bank chief economist Robert Dan Roces holds an optimistic view, noting the likelihood of an above 6-percent expansion in the fourth quarter owing to higher consumption and low inflation.

“Benign (inflation) coming into the fourth quarter will stimulate consumption even further. The higher consumption will again push growth above the 6 percent threshold,” Roces said.

However, he said growth averaging 6.7 percent needed to seal the low-end target could prove a tall order.

“We think that 6.7 percent might be too steep considering base effects year-on-year and thus, we retain our fourth-quarter growth forecast at 6.5 percent, with full year average at 5.95 percent,” he said.

MUFG Bank ASEAN head for Global Markets Research Leong Sook Mei said given the 6.2 percent GDP expansion in the third quarter, their 5.8 percent full-year forecast for the Philippines needs a slight revision. He did not comment on the likelihood for growth to hit 6 percent.