Recto sees 6% growth in third quarter

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RACKS of garments were seen during a sale at a mall in Quezon City, Sept 18, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE PHILIPPINE ECONOMY likely grew by 6% within the third quarter as declining inflation could have fueled a rebound in consumer spending, Finance Secretary Ralph G. Recto said.

“I’m still hoping 6%, more in order that inflation is declining,” Mr. Recto told reporters on the sidelines of an event late on Tuesday.

“The largest [driver] can be household consumption, which is 75% of the economy,” he added.

For so long as household consumption grows by 6%, Mr. Recto said, the economy would likely grow by 6%. 

Economic managers are targeting 6-7% growth this 12 months. 

Within the second quarter, gross domestic product (GDP) expanded by 6.3% as improved government spending and investments offset weak consumption growth. Household spending within the April-June period grew by 4.6% 12 months on 12 months, the weakest because the first quarter of 2021. 

For the first half, GDP growth averaged 6%. The economy has to grow by at the least 6% within the second half to hit the low end of the goal.

The statistics agency is anticipated to release third-quarter GDP data on Nov. 7.

Mr. Recto said slowing inflation likely helped drive growth within the July-to-September period.

The patron price index eased to a four-year low of 1.9% 12 months on 12 months in September from 3.3% in August as food and transport costs declined.

12 months so far, inflation averaged 3.4%, settling throughout the 2-4% goal range of the Bangko Sentral ng Pilipinas (BSP).

Mr. Recto said the Development Budget Coordination Committee (DBCC) could meet before yearend to review the macroeconomic assumptions and targets.

“I believe the DBCC should meet but perhaps in December… not likely to regulate but simply to review not only growth targets but take a have a look at your complete macro-fiscal framework,” he said.

Mr. Recto said that any adjustments to the federal government’s growth and financial targets needs to be for next 12 months, as economic managers even have to contemplate other aspects akin to external headwinds.

“We have now to try what’s happening globally also. For instance, we’ve got to organize just in case you might have more tensions within the Middle East,” he said.

At its last meeting in June, the DBCC kept the 2024 GDP growth goal at 6-7% and 6.5-7.5% GDP expansion for 2025. It targets 6.5-8% growth from 2026 to 2028.

Earlier this week, Budget Secretary and DBCC Chairperson Amenah F. Pangandaman raised the potential for an upward revision of this 12 months’s growth goal amid slowing inflation and improved state spending.

Meanwhile, Albay Rep. Jose Ma. Clemente S. Salceda, who also heads the House Committee on Ways and Means, gave a 5.7-6.1% GDP growth forecast for the third quarter.

“Inflation, while obviously slowing down, would still have had some real impact on the consumption patterns of consumers. I expect robust consumption of basic goods to have persevered, but some weakness in discretionary spending,” he said in a Viber message.

Rizal Business Banking Corp. Chief Economist Michael L. Ricafort said he sees at the least 6% economic growth within the July-to-September period, driven by higher jobs data.

“Easing inflation trend would boost consumer spending… amid the online improvement in employment data in recent months to amongst the very best in 19 years,” he said in a Viber message.

The unemployment rate eased to 4% in August from 4.7% in July and 4.4% in August last 12 months. This translated 2.07 million unemployed Filipinos, down by 305,000 from July and by 149,000 from a 12 months earlier.

The employment rate in August rose to 96%, akin to 49.15 million employed Filipinos, from 95.3% in July and 95.6% a 12 months ago. — Beatriz Marie D. Cruz

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