THE PHILIPPINE ECONOMY may have grown by 6% in the third quarter as it declined byfmay have fueled a decline in consumer spending, said Treasury Secretary Ralph G. Recto.
“I still hope for 6%, more so that the inflation will decrease,” said Mr. Recto told reporters on the sidelines of the event on Tuesday night.
“The big one [driver] it will be used in households, which is 75% of the economy,” he added.
As long as household consumption grows by 6%, Mr. Recto said, the economy will grow by 6%.
Economists are looking at 6-7% growth this year.
In the second quarter, gross domestic product (GDP) grew by 6.3% as improved government spending and investment offset weak consumption growth. Household spending in the April-June period grew 4.6% year-on-year, the weakest since the first quarter of 2021.
Of course fIn the first half, GDP growth reached 6%. The economy must grow by at least 6% in the second quarter to reach the target.
The statistics agency is expected to release third-quarter GDP data on Nov. 7.
Mr. Recto said lower inflation is likely to help 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 transportation costs fell.
The year so far, infaveraged 3.4%, staying within the 2-4% target range of the Bangko Sentral ng Pilipinas (BSP).
Mr. Recto said that the Development Budget Coordination Committee (DBCC) can meet before the end of the year to review the views and goals of the macro economy.
“I think the DBCC should meet but maybe in December…fiscal framework,” he said.
Mr. Recto said any changes to the government’s growth and fiscal policies should be for next year, as economic managers also have to consider other factors such as external shocks.
“We have to look at what is happening around the world. For example, we have to prepare ourselves in case there is more tension in the Middle East,” he said.
At its last meeting in June, the DBCC kept the 2024 GDP growth target at 6-7% and 6.5-7.5% GDP growth in 2025. It aims to grow by 6.5-8% from 2026 to 2028.
Earlier this week, Budget Secretary and DBCC Chairperson Amenah F. Pangandaman suggested the possibility of revising this year’s growth target amid the low inflation and improved government spending.
Meanwhile, Albay Rep. Jose Ma. Clemente S. Salceda, who also leads the House Committee on Ways and Means, gave a forecast of GDP growth of 5.7-6.1% in the third quarter.
“Inflation, although clearly decelerating, would have a real impact on consumer spending patterns. I expect strong consumption of basic goods to continue, but some weakness in spending in sight,” he said in a Viber message.
Chief Economist Rizal Commercial Banking Corp. Michael L. Ricafort said he sees at least 6% economic growth in the July to September period, driven by better jobs data.
“The reduction in inflation will boost consumer spending … amid a net improvement in employment data in recent months to among 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 translated to 2.07 million unemployed Filipinos, down 305,000 from July and 149,000 from last year.
The employment rate in August rose to 96%, equivalent to 49.15 million Filipinos employed, up from 95.3% in July and 95.6% last year. – Beatriz Marie D. Cruz
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