Reported by Luisa Maria Jacinta C. Jocson, Reporter
According to First Metro Investment Corp. (FMIC) and the University of the Asia and the Pacific (UA&P), the Philippine economy is likely to grow by approximately 5.2% in the third quarter. This falls short of the government’s goal and comes after its weakest growth in over two years in the previous quarter.
According to a report, the economy is still showing strong enough performance to achieve a 5-5.2% year-on-year growth in the third quarter of gross domestic product (GDP).
The previous predictions of FMIC and UA&P indicated that the GDP for the whole year would reach the lower range of the government’s 6-7% target. However, the GDP for the second quarter only grew by 4.3%, which was lower than expected, resulting in a first-half growth of 5.3%.
On November 9, the local statistics agency will release data on the GDP for the third quarter.
The report states that growth in the third quarter will be fueled by state and consumer spending, as well as an increase in job opportunities.
FMIC and UA&P stated that the increase in National Government expenditure during the third quarter will serve as a catalyst for the quarter, despite their prediction of a significant recovery in employment and consumer spending beginning in September.
They anticipate a significant increase in job opportunities by September as companies prepare for the holiday season, particularly in industries that have been negatively affected by recent circumstances.
Fourth-quarter expansion is likely to surpass 6%, according to FMIC and UA&P, driven by a resurgence in consumer consumption and advancements in the industry, manufacturing, and service fields.
They stated that the growth of the industry sector will be widespread, with manufacturing leading the way. They also mentioned that the service sector is expected to experience an increase in trade, transportation and storage, as well as accommodations and food services, driven by both domestic and foreign tourism starting in September.
They stated that despite the global slowdown, we can still expect a decent 5.5% increase in GDP for the full year.
FMIC and UA&P anticipate that inflation will remain high until October, but it is expected to reach the target set by the Bangko Sentral ng Pilipinas (BSP) by November.
According to the report, the prediction for inflation has become uncertain. It is still anticipated that the overall inflation rate will drop below the 4% target set by BSP by November, despite the likelihood of continued high prices for crude oil until then.
The rate of inflation rose to 5.3% in August, surpassing the central bank’s target of 2-4% for the 17th consecutive month. This comes after a period of decline in the previous six months. So far this year, inflation has averaged at 6.6%, exceeding the BSP’s prediction of 5.8% for the entire year.
During this week, fuel companies decreased the cost of gasoline and diesel by 20 centavos per liter and kerosene by 50 centavos per liter. This marks the conclusion of 11 consecutive weeks of price hikes since July.
Several legislators have suggested a temporary halt on taxes for petroleum products due to elevated fuel costs at the pump.
According to the report by FMIC and UA&P, it is expected that food prices will slow down as rice harvests enter the market in late September and October. This coincides with the decrease in Thai rice prices from their peak in August.
Earlier this month, President Ferdinand R. Marcos, Jr. implemented a limit on the price of regular and well-milled rice due to the rising prices.