Final quarter growth robust

Recent economic numbers all point to a sustained, strong fourth quarter economic performance, a Cabinet official said on Thursday.

"The jobs market continues to improve with the unemployment rate down to its lowest level in 17 years, manufacturing output is rising and capacity utilization rate is improving, the peso has stabilized and is growing stronger, and oil prices are falling to near pre-Russian invasion of Ukraine levels," Finance Secretary Benjamin Diokno said.

Diokno also said that strong growth in the fourth quarter will result in the peso stabilizing, oil prices falling and a drop in inflation which is currently the top concern of the present administration.

Bangko Sentral ng Pilipinas projects inflation to average 5.8 percent this year, then slow down to the two percent to four percent target band in 2023, before it settles at the midpoint of the target band by 2024, the Finance chief.

"With the recent numbers, the likelihood that the BSP forecast, which was adopted by the Development Budget Coordination Committee will be achieved is getting stronger," Diokno said.

Unemployment lowest in 17 years

The 4.5 percent unemployment rate was the lowest since October 2005 data from Philippine Statistics Authority showed.

The related employment numbers are equally encouraging. Underemployment rate or those looking for more hours of work slid to 14.2 percent in October this year from 15.4 percent in September this year, and 16.1 percent in October last year.

The average number of hours worked also increased in October compared to September this year.

Furthermore, manufacturing posted the fifth month of growth at 5.1 percent in October, according to the Philippine Statistics Authority's latest Monthly Integrated Survey of Selected Industries.

This year the country recorded contractions in April and May. But since June the Volume of Production Index has been growing.

The manufacturing sector posted its highest average capacity utilization rate for the year at 72.4 percent in October 2022. That sector is recovering well. The PSA reported that almost one-fifth (19.9 percent) of firms operated at full capacity and that some 40.4 percent operated at 70 percent to 80 percent capacity.

Inflation cools

Diokno said regarding inflation, the forecast earlier suggested slowing down as early as the first quarter of next year. Two main contributors to this trend are world oil prices and the appreciation of the peso.

"Oil fell to close to the lowest level this year, pressured by concern about a global recession. Dubai crude fell to $75.12 per barrel on 6 December," the secretary said.

"The peso appreciated further against the dollar on Wednesday to P55.45, surging by 52.5 centavos from P55.975 per dollar on Tuesday," he added.