Ph economy grows 7.6 percent in third quarter

MANILA, November 10 ------ The Philippine economy expanded further in the third quarter despite quickening inflation, rising interest rates, the depreciating peso, and continued global challenges.

The country's gross domestic product (GDP) in the third quarter grew 7.6 percent, faster than the revised 7.5 percent expansion in the second quarter and the 8.2 percent in Q1, the Philippine Statistics Authority said in a briefing. Economic managers are expecting GDP to grow between 6.5 to 7.5 percent this year, down from 7 to 8 percent amid rising inflation and interest rates. To achieve a cumulative 7.5 percent growth, the economy needs to grow by 7.2 percent in the second half of the year.

Inflation hit 7.7 percent in October, way beyond the government target of 2 to 4 percent. Meanwhile, remittances and business process outsourcing (BPO) receipts are expected to surge during the remaining months of the year which can support the peso and boost consumption but also inflation. Bangko Sentral ng Pilipinas Governor Felipe Medalla had already said that the monetary board would match the US Federal Reserve's 75-basis point interest hike to protect the peso and arrest inflation. Higher interest rates will push borrowing rates up as well as dampen consumption, which in turn may impact economic growth. But both Medalla and Finance Secretary Benjamin Diokno have said that the country's fundamentals remain strong and that the economy could absorb further tightening of its key policy rate.

The overnight rate has been raised by a cumulative 225 basis points to 4.25 percent, from its record low of 2 percent during the peak of the COVID-19 pandemic. Businesses are optimistic that 2022 will be better than 2021, with the easing of restrictions and reinvigoration of economic activities, aviation and tourism. The economy exceeded expectations in 2021 with a 5.6 percent GDP growth.

Source: news.abs-cbn.com