Phl economy rebounded in Q4 – Moody’s

MANILA, Philippines - Philippine economic growth could have rebounded in the last quarter of 2014 on sustained increase in consumer spending and steady inflows of investments, Moody’s Analytics said.

In a research note, the firm said gross domestic product, a measure of an economy’s total output, could have expanded by 6.1 percent in the fourth quarter of 2014 following a lower-than-expected 5.3 percent in the third quarter.

“A fall in agricultural production and a decline in government spending dragged third quarter GDP growth to its slowest pace in three years. These factors should be transitory, and we expect economic growth to rebound in the fourth quarter report,” Moody’s Analytics said.

“Business sentiment and investment remain buoyant and should make a solid contribution to growth. Consumer demand accounts for 70 percent of GDP and will continue to grow at around five percent year-on-year,” it said.

Official fourth quarter and full-year GDP data will be released by the government on Jan. 29.

Economic growth in the third quarter was driven by the manufacturing and services sector. It was also supported by domestic consumption, fixed capital formation, and net exports.

The dismal third-quarter growth brought the nine-month growth to 5.8 percent, way below the government’s 6.5- to 7.5-percent target for 2014.

The International Monetary Fund and the World Bank earlier this month lowered their forecasts for Philippine economic growth in 2014 following the deceleration in the third quarter.

The IMF downgraded its estimated to 5.8 percent from 6.2 percent, while the World Bank cut its projection to six percent from 6.4 percent.

For this year and the next, the government hopes growth could settle between seven and eight percent.