Economy recovers after slow quarter

(UPDATE) THE Philippine economy grew by a better-than-expected 5.9 percent in the third quarter, the government reported on Thursday, with a rebound in state spending said to have particularly factored in the acceleration.

The result, while down from 7.7 percent a year earlier, was an improvement from the disappointing 4.3 percent posted in the second quarter. It was also markedly higher than the 4.9 percent median forecast in a Manila Times poll of economists.

The Philippine Statistics Authority (PSA) said all economic sectors recorded positive results, with services by 6.8 percent, industry growing by 5.5 percent, and agriculture, forestry and fishing expanding by 0.9 percent.

The main contributors to third-quarter growth, the PSA said in a statement, were wholesale and retail trade and the repair of motor vehicles and motorcycles (which grew by 5.0 percent), financial and insurance activities (9.5 percent), and construction (14.0 percent).

On the demand side, household spending grew by 5.0 percent, while government spending and exports expanded by 6.7 percent and 2.6 percent, respectively. On the other hand, gross capital formation and imports fell by 1.6 percent and 1.3 percent, respectively.

Socioeconomic Planning Secretary Arsenio Balisacan said third-quarter growth was broadly based and made «our economy the fastest among the major emerging economies in Asia that have released their third-quarter 2023 GDP growth.»

The National Economic and Development Authority chief noted that, in comparison, Vietnam grew by 5.3 percent, Indonesia and China by 4.9 percent each, and Malaysia by 3.3 percent.

Government officials did not say whether the full-year 6.0- to 7.0 percent growth target could still be achieved, but Balisacan said the economy would have to grow by 7.2 percent in the last three months of 2023.

Household spending slowed during the quarter from 5.5 percent three months earlier as inflation picked up anew. The drop in gross capital formation, meanwhile, was attributed to inventory drawdowns and a marked slowdown in durable equipment (1.7 percent from 10.5 percent).

«These outweighed the faster growth in both public construction, which grew by 26.9 percent