The Bangko Sentral ng Pilipinas, or BSP, believes economic growth in the fourth quarter will be relatively stable or close to the previous quarter's 5.9 percent.

"Our models have shown that we'll have a relatively strong fourth quarter outlook and also will be similar to the third-quarter performance," BSP Department of Economic Research officer-in-charge Dennis Lapid said.

Lapid attributed the growth forecast to likely high government spending on public projects and social services.

"The government is committing to push economic growth towards the target and the fiscal authorities are doing that," he said.

The Department of Finance and the Development Budget Coordination Committee expect the country's economic growth measured in gross domestic product or GDP to reach 6 to 7 percent this year.

Government spending 

In the third quarter, GDP growth jumped to 5.9 percent from 4.3 percent in the second quarter, reflecting a turnaround in government spending.

The government accelerated its spending to 6.7 percent expansion from 7.1 percent contraction.

"In the fourth quarter, fiscal authorities are trying to ramp up spending for  programs," Lapid said.

For the central bank's inflation outlook, BSP Governor Eli Remolona Jr. said its Monetary Board is still keeping an eye on El Niño in determining the severity of its impact on food prices.

Still not out of the woods

"We're still not out of the woods. In our analysis, the first quarter of 2024 might be bad due to El Niño and the rest are supply shocks which are more or less anticipated," he said.

The Philippine Atmospheric, Geophysical and Astronomical Services Administration projects the dry weather to last until the middle of next year.

While inflation risks from El Niño-induced food shortage exist, Lapid said demand for non-food and non-oil prices under core items could prevent drastic rise in overall inflation next year.

"Demand for non-core items is weakening in major economies that provides downward influence on commodity prices," he said.

Overall inflation to slow down

Partly due to these factors, the Monetary Board expects overall inflation to slow below 3 percent in the first quarter next year before rising again.

Household consumption slightly slowed to 5 percent in the third quarter this year from 5.5 percent in the previous quarter amid high interest and inflation rates.

To manage inflation by restraining consumer demand for goods and services, Remolona said the Monetary Board will "unlikely cut interest rates in the next few months."

The Monetary Board recently kept its policy rate at 6.5 percent after inflation settled at 4.1 percent in November or above the government's target of 2 to 4 percent.

The central bank estimates average inflation to figure at 6 percent this year, 3.7 percent for 2024 and 3.2 percent for 2025.

Remolona said the Monetary Board will continue to monitor recent economic data to control inflation without stifling economic growth.

"We don't want to tighten unnecessarily so that it affects economic growth. We're going to stick with a data-dependent approach," he said.