Economy Grows By 7.1% In Q3 – Among The Highest in Southeast Asia
Despite the pandemic, the Philippine economy grew by 7.1 percent from July to September, one of the strongest third-quarter growth rates in the Association of Southeast Asian Nations and East Asian region, increasing hopes for a strong recovery next year.
The third-quarter gross domestic product (GDP) was better than the -11.6 percent recorded in the same quarter of 2020, but lower than the 12 percent recorded in the second quarter of this year, owing to base effects. Year-to-date, the economy has grown by 4.9 percent.
Socioeconomic Planning Secretary Karl Kendrick Chua said in a virtual press briefing Tuesday:
“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.”
According to Philippine Statistics Authority (PSA) Undersecretary Dennis Mapa, the country’s GDP should expand at 5.3 percent in the fourth quarter to meet the upper end of their 4 to 5-percent target growth forecast this year, and at 1.7 percent to meet the lower end.
Chua said the economy grew 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.
The government will expedite its immunization efforts, reopen to Alert Level 1 in January 2022, and optimize the usage of the 2021 budget in order to continue the country’s growth this year and next year. A total of 64.2 million vaccination doses have been distributed as of Nov. 7. 34.7 million doses were given as the first dose, and 29.5 million doses were given as the total dose.
Chua is confident that the country is on track for a strong recovery as long a there is no unexpected new risk like a stronger variant or a global surge. He also shed some light on the oil prices and said that the country will continuously monitor the global oil prices. The future prices are on the downtrend now so the country’s policy response will also be based on whether this is a temporary or a more permanent increase in the oil price and all been laid out to address the temporary increase in oil prices.
Meanwhile, in his report, the industries sector gained 7.9% in the third quarter, while the services sector rose 8.2%. On the other hand, Agriculture fell by 1.7 percent which was due to the typhoon damages to other agricultural crops and by the African swine fever to livestock despite the increase in palay production.
On the expenditure side, household consumption climbed by 7.1 percent, accounting for 5.2 percentage points of overall GDP growth. This strong rebound points to improving consumer confidence. Chua said they are expecting this to be sustained in the fourth quarter given more relaxed restrictions and a higher vaccination rate.