BSP says GDP growth accelerated in Q4

MANILA, Philippines - Economic growth likely accelerated in the fourth quarter from the 5.3-percent expansion in the third quarter, the Bangko Sentral ng Pilipinas said yesterday.

“Other indicators continued to point to positive growth momentum in the fourth quarter,” the central bank said in a report.

The Business Expectations Survey, for one, showed local firms were more upbeat in the fourth quarter on anticipation of the government’s roll our of more infrastructure and development projects and the favorable macroeconomic conditions enjoyed by the Philippines.

“The results of the monthly Purchasing Managers’ Index (PMI) survey likewise indicated that domestic output continue to expand in October 2014 after slowing down in Q3 partly due to supply chain problems,” the BSP said.

“The sustained expansion in bank lending also supports the view that underlying domestic demand remains strong,” the BSP said.

Official fourth quarter data for the gross domestic product, a measure of an economy’s total output, will be released by the government by the end of this month.

The economy expand by 5.3 percent in the third quarter last year, slower than the 6.4 percent in the second quarter. This brought the nine-month growth rate to 5.8 percent, way below the full-year target of 6.5 to 7.5 percent.

“GDP growth decelerated in the third quarter of 2014... driven mainly by government underspending. The slowdown was across the board but the composition of growth remained similar to that seen in the first half of 2014,” the BSP said.

Economic growth during the third quarter was driven by the manufacturing and services sectors. The BSP noted domestic consumption, fixed capital formation, and net exports also supported growth during the period.

For this year, the government hopes to grow the economy by seven to eight percent. This range is also being eyed for 2016 after government officials earlier this week cut the forecast from 7.5 to 8.5 percent.

BSP Governor Amando M. Tetangco Jr. earlier this week said the economy should be able to weather headwinds this year brought about by uneven growth prospects in the global front.

Tetangco stressed economic growth remains strong on a broadening production base and solid domestic demand despite slower public spending and weak performance of the agriculture sector.