THE PHILIPPINE ECONOMY probably grew 6% in the third quarter as the economy slowedFThis could have fueled a rebound in consumer spending, Treasury Secretary Ralph G. Recto said.
“I still hope for 6%, and even more that inflation decreases,” Mr Recto told reporters on the sidelines of an event late on Tuesday.
“The biggest [driver] would be household consumption, which makes up 75% of the economy,” he added.
As long as household consumption grows at 6%, Mr. Recto said, the economy will likely grow at 6%.
Economic managers are targeting growth of 6 to 7% this year.
In the second quarter, gross domestic product (GDP) grew 6.3% as improved government spending and investment offset weak consumption growth. Household spending grew at an annual rate of 4.6% in the April-June period, the weakest since the first quarter of 2021.
For the FIn the first half, GDP growth averaged 6%. The economy must grow by at least 6% in the second half of the year to reach the lower end of the target.
The statistics agency is expected to release third-quarter GDP data on November 7.
Mr Recto said slowing inflation likely helped boost growth in the July to September period.
The consumer price index fell to a four-year low of 1.9% annually in September from 3.3% in August as food and transport costs fell.
Year to date, inFInflation averaged 3.4%, remaining within the Bangko Sentral ng Pilipinas (BSP) target range of 2-4%.
Mr Recto said the Development Budget Coordination Committee (DBCC) could meet before the end of the year to review macroeconomic assumptions and targets.
“I think the DBCC should meet, but maybe in December… not really to adapt, but just to review not only the growth targets but also to look at the whole macroeconomic situation.Fical framework,” he said.
Mr Recto said any adjustments to the government’s growth and budget targets for next year should be made as economic managers must also consider other factors such as external headwinds.
“We also have to look at what is happening globally. For example, we need to prepare in case there are more tensions in the Middle East,” he said.
At its last meeting in June, the DBCC kept the GDP growth target for 2024 at 6-7% and GDP growth of 6.5-7.5% for 2025. The target is a growth of 6.5 -8% between 2026 and 2028.
Earlier this week, Budget Minister and DBCC Chairman Amenah F. Pangandaman raised the possibility of an upward revision to this year’s growth target, against the backdrop of slowing inflation and improved state spending.
Meanwhile, Albay Rep. Jose Ma. Clemente S. Salceda, also chairman of the House Committee on Ways and Means, gave a GDP growth forecast of 5.7-6.1% for the third quarter.
“Although inflation is clearly slowing, it would still have had a real impact on consumer consumption patterns. I expect robust consumption of staples to continue, but some weakness in discretionary spending,” he said in a Viber message.
Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said he expects economic growth of at least 6% in the July to September period, driven by better employment figures.
“A declining inflation trend would boost consumer spending… amid the net improvement in employment numbers in recent months to the best in 19 years,” he said in a Viber message.
The unemployment rate fell to 4% in August from 4.7% in July and 4.4% in August last year. This meant 2.07 million unemployed Filipinos, down 305,000 from July and 149,000 from a year earlier.
The labor force participation rate rose to 96% in August, equivalent to 49.15 million working Filipinos, up from 95.3% in July and 95.6% a year ago. — Beatriz Marie D. Cruz