High growth spurred by consumption

The Philippines' steady consumption, bolstered by the reopening of economic activities, government subsidies and cash handouts, and the expansion in the services and manufacturing sector, pushed the domestic economy to expand by 7.6 percent in the third quarter, Moody's Analytics said.

In its weekly Asia Pacific Economic Preview, Moody's Analytics said that the Philippines, together with Malaysia and Indonesia, showed stronger year-on-year growth than in the previous quarter.

"The Philippines and Malaysia exceeded expectations, with their economies growing 7.6 percent and 14.2 percent, respectively. Private consumption and investment contributed strongly to growth," it said.

It added that the removal of Covid-19 restrictions and the return of international tourists fueled spending on transport, dining out, hotel accommodation, and health.

State aid boosts economy

Moody's continued, "Government subsidies and cash handouts also bolstered consumption, which climbed by a seasonally adjusted 5.7 percent from the prior quarter after a 2.7 percent fall in the second quarter.

In addition, the service space, which employs more people than any other in the country, grew by a seasonally adjusted 4.2 percent from the second quarter. The biggest mover within the services sector was transportation and storage.

This was followed by wholesale and retail trade. Unemployment in September fell to the lowest level since the onset of the pandemic, which bodes well for consumption, the report added.

Meanwhile, industrial production rose 2.4 percent year-on-year in September, compared with a revised 4.4 percent increase in August. Manufacturing of nonelectric machinery and equipment led to growth in value and volume terms.

However, Moody's Analytics noted that manufacturing of electrical equipment, an essential sector for the economy, recorded the largest falls in volume and value terms since July.