THE ECONOMY grew by 4 percent in the third quarter of this year, the slowest pace seen in four years, as the recent infrastructure scandal curbed public spending while a series of typhoons disrupted activities.
This marked the slowest performance since the first quarter of 2021, when the local economy had contracted by 3.8 percent due to the stringent lockdown protocols triggered by the COVID-19 pandemic.
The third quarter growth failed to meet the Marcos administration’s target of 5.5 percent to 6.5 percent. It was also much lower than the market consensus of 5.2 percent based on a poll by Bloomberg.
Gross domestic product (GDP) in the three months ending September also dropped sharply from 5.5 percent in the second quarter, as well as from the 5.2 percent growth recorded in the same period last year, the Philippine Statistics Authority (PSA) reported on November 7.
The latest figure, which brought the year-to-date growth average to 5 percent, confirmed earlier concerns from officials and some analysts ahead of the data release.
“The Philippine economy continues to grow, but the third quarter performance reminds us of the urgent need to address key challenges and strengthen our foundations for rapid, sustained and inclusive growth,” said Secretary Arsenio Balisacan of the Department of Economy, Planning and Development.
Growth drivers
According to Balisacan, services and industry posted a weaker growth this third quarter. These sectors were dragged by the sharp contraction in public construction amid delayed infrastructure spending, as probes into the anomalous flood control projects continue.
He added that household consumption also slowed to 4.1 percent, driven by typhoon disruptions that dampened spending.
The main contributors to the third quarter growth were: wholesale and retail trade; repair of motor vehicles and motorcycles, 5 percent; financial and insurance activities, 5.5 percent; and professional and business services, 6.2 percent.
By sector, the services sector posted the highest growth rate of 5.5 percent.
The agriculture, forestry and fishing sector grew by 2.8 percent.
The industry sector grew by a modest 0.7 percent.
Coupled with the benign inflation rate of 1.7 percent in October, the latest growth data keeps the door open for more policy rate cuts through the rest of the year and into 2026, which the Bangko Sentral ng Pilipinas will review on Dec. 11. (Nyah Genelle C. De Leon © Philippine Daily Inquirer)
