MANILA – An economist of ING Bank Manila has forecast a 6.6-percent growth in the country’s Gross Domestic Product (GDP) in the third quarter of 2017.
In a research note, ING Bank Manila senior economist Joey Cuyegkeng attributed his positive projection for July to September to robust consumption.
“Supported by remittances, we expect tomorrow’s 3Q GDP report to reveal private consumption remaining the main driver of GDP growth,” he said Wednesday, forecasting real household spending to rise nearly 6 percent.
Growth expanded by 6.5 percent in the second quarter of this year, higher than the 6.4 percent in the previous quarter but lower than the 7.1 percent in the same period in 2016.
It brought the first half output to 6.4 percent, slightly below the lower end of the government’s 6.5 percent to 7.5 percent growth target for the year.
Growth last year was boosted by election spending, Cuyegkeng said, adding that he expects this to return in 2018 ahead of the May 2019 mid-term polls.
Earlier, an economist of DBS Bank Ltd. forecast a 6.5 percent output for the Philippine economy in the third quarter of 2017, the same as the previous quarter’s performance.
In a research note Monday, DBS Bank Group Research economist Gundy Cahyadi said upside risks on gross domestic product (GDP) are expected, citing the 19.9 percent expansion of bank loans in the thid quarter alone.
“This is indicative of strong domestic demand, even if the high base effects may mean investment growth is likely to have eased to 6.6 percent in the period,” he said.
“We expect consumption growth to also remain strong at 6.3 percent, partly supported by robust remittances flows, which are on track to reach a record-high of USD28 billion this year,” he added.
The government is scheduled to report the third-quarter domestic output Thursday.
National Economic and Development Authority (NEDA) chief Ernesto Pernia said he is optimistic about the sustained expansion of the domestic economy, noting that for the third quarter alone, there was no major weather disturbance that would hurt growth.
He forecast full-year output at about 7 percent.
Growth in the second quarter this year slightly went up from the previous quarter’s 6.4 percent, but is lower than the 7.1 percent in the second quarter of 2016.
It was boosted by manufacturing, trade, real estate, renting and business activities.
The industry sector posted the highest output at 7.3 percent followed by agriculture, which recovered and hit a 6.3 percent growth from a two percent decline in the previous year.
Services remain robust with a 6.1 percent growth but is slower than the 8.2 percent growth in the second quarter of 2016.
In the first half this year, growth averaged at 6.4 percent, slightly below the low-end of the government’s 6.5 to 7.5 percent target for the year.