Economic activity likely slowed in Q3

MANILA, Philippines - Economic activity likely slowed in the third quarter given the decline in an index which tracks key indicators in the current quarter, the National Statistical Coordination Board (NSCB) reported.

In a statement, the NSCB said the composite leading economic indicator (LEI), a tool used to forecast short-term macroeconomic performance, slid slightly to 0.146 in the third quarter from a revised 0.206 in the second quarter.

“This indicates a possible slowdown of economic activity in the country for the quarter,” it said.

Seven of the 11 indicators of the LEI posted declines which are: money supply, total merchandise imports, wholesale price index, visitor arrivals, hotel occupancy rate, number of new businesses and consumer price index.

The seven indicators accounted for 72.2 percent of the total contribution to the index.

Four indicators, meanwhile, posted gains which are: terms of trade index, electric energy consumption, stock price index and foreign exchange rate.

The combined share of the indicators with positive contributions to the index was down to 27.8 percent in the third quarter from the previous quarter’s 78.9 percent.

For the third quarter LEI, seven indicators had shifts in their contribution compared to the previous quarter.

Indicators which shifted from positive to negative contribution to the index were; hotel occupancy rate, money supply, number of new businesses, visitor arrivals, and total merchandise imports.

Electric energy consumption and foreign exchange rate meanwhile shifted from negative to positive contributors to the index.

The economy grew 6.4 percent in the first three months of the year, the second strongest growth posted in the region for the period, amid accelerated government spending and a rebound in exports.

Socioeconomic planning chief Arsenio Balisacan said earlier this month second quarter growth is expected to be close to the first quarter expansion.

The NSCB is set to release data on second quarter economic performance on Thursday.