PH economy grows 7.1% in Q3, still among highest in SE Asia

MANILA – The Philippine economy expanded by 7.1 percent from July to September, among the highest third-quarter growths in the Association of the Southeast Asian Nations and East Asian region amid the pandemic, boosting optimism about staging a strong recovery next year.

The third-quarter gross domestic product (GDP) was higher compared to -11.6 percent in the same period in 2020, but lower than the 12 percent in the second quarter this year mainly driven by base effects. Year-to-date growth is currently at 4.9 percent.

“Our progress in the third quarter shows that the recovery is accelerating, and it is very likely that we will hit or even exceed the high-end of our growth target for 2021. Of course, this entails everyone’s cooperation, it entails managing the risk better and moving forward towards Alert Level 1 by the end of the year or early 2022,” Socioeconomic Planning Secretary Karl Kendrick Chua said in a virtual press briefing Tuesday.

Philippine Statistics Authority (PSA) Undersecretary Dennis Mapa said the country’s GDP should grow at 5.3 percent during the fourth quarter to hit the high-end of the 4 to 5-percent growth target for this year, and about 1.7 percent to achieve the lower-end of the target.

Reading a joint statement of the government’s economic managers, Chua said the economy expanded by 3.8 percent on a seasonally adjusted quarter-on-quarter basis, indicating sustained recovery despite two weeks of enhanced community quarantine (ECQ) and a month of modified enhanced community quarantine (MECQ) in the country’s economic centers.

To further sustain the country’s growth this year and next year, Chua said the government will further accelerate the vaccination program, reopen to Alert Level 1 in January 2022, and maximize the use of the 2021 budget.

As of Nov. 7, a total of 64.2 million vaccine doses have been rolled out. Of these, 34.7 million doses were administered as the first dose and 29.5 million were administered as the complete dose.

“So long as there is no unexpected new risk like a stronger variant or a global surge, then, I think we are clearly on track to a strong recovery,” he added.

Chua, chief of the National Economic and Development Authority (NEDA), said the country will also continuously monitor the global oil prices.

“As we are seeing now, the future prices are on the downtrend so our policy respond will also be based on whether this is a temporary or a more permanent increase in the oil price but so far, we are seeing it is a downtrend and our policies I think have been all been laid out to address the temporary increase in oil prices,” he added.

Meanwhile, Chua said that on the production side, the industry sector expanded by 7.9 percent in the third quarter, while the services sector grew by 8.2 percent.

In contrast, agriculture slightly declined by 1.7 percent.

“The increase in palay production, which was aided by the continued implementation of the Rice Competitiveness Enhancement Fund, was more than offset by typhoon damages to other agricultural crops and by the African swine fever to livestocks,” he said.

On the expenditure side, Chua said growth was primarily driven by household consumption, which grew by 7.1 percent and accounted for 5.2 percentage points of overall GDP growth.

“This strong rebound points to improving consumer confidence. We expect this to be sustained in the fourth quarter given more relaxed restrictions and a higher vaccination rate,” he added.