Range lower than 1st half result but above full-year target
THE ECONOMY likely expanded between 6.7% and 7.7% in the third quarter, the government yesterday said, keeping the country on track to achieving above target growth this year.
The range falls below the 7.8% and 7.9% upticks recorded in the first and second quarters, respectively, but is above the government’s full-year goal of 5.0-6.0%.
Margarita R. Songco, deputy director general of the National Economic and Development Authority (NEDA), said a strong performance by the industry sector would offset a continued contraction in farm output.
"GDP (gross domestic product) growth ... could have been limited by the negative impact of the prolonged El Niño phenomenon on the agriculture sector," Ms. Songco said at a briefing called ahead of Thursday’s official release of third-quarter growth data.
"The industry sector is expected to be the main growth driver in the third quarter considering that strong external and domestic demand continued to fuel the manufacturing, construction and mining, and quarrying subsectors."
Ms. Songco added the services sector "may have also contributed significantly."
Economists polled earlier by BusinessWorld offered forecasts ranging from 6.7% to 7.5% for July to September GDP growth, also pointing to the industry sector as making up for weak farm output and reduced government spending.
They also expect full-year growth to exceed the official 5.0-6.0% target, with their forecasts ranging from 6.0% to 7.4%.
Analysts polled by Reuters, meanwhile, expect annual growth of 6.8% in the third quarter, at the low end of the government’s 6.7-7.7% outlook.
The government is targetting growth of 7.0-8.0% in 2011 and beyond, but signs of an Asia-wide slowdown with stimulus spending fading and slowing manufacturing and exports puts Manila’s bullish forecast at risk.
Figures on Monday showed Thailand, Southeast Asia’s second biggest economy, had slipped into a technical recession in the third quarter.
Finance Secretary Cesar V. Purisima, speaking yesterday at a briefing at his department, said the government was sticking to the 5.0% growth goal used in setting next year’s budget.
"We’ll be happy if we meet 5.0%. We’ll be happier to reach 7.0% to 8.0%," he said.
Budget Secretary Florencio B. Abad said in the same briefing that 7.0-8.0% was a "fighting target."
"The approach is really to have a conservative plan. We can ... have [a] better [performance], but we are sticking to original plan because the global economy is still volatile and [it would be] prudent on our part as economic managers to be not to aggressive," Mr. Purisima said.
He said the government would "take advantage" of opportunities.
"We can bid out more PPP (public-private partnership) projects next year [if that happens] and if the market is [seen to be] more receptive for more," he added. -- Jo Javan A. Cerda with a report from Reuters
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