market news

Philippine economy grows by 7.6% on-year in Q3, beating forecasts

Philippine economy grows by 7.6% on-year in Q3, beating forecasts

The Philippines recorded a faster-than-expected economic growth in the July-September quarter, with a 7.6% increase year-on-year bolstered by the pent-up domestic demand.

However, the government noted that the recovery was accompanied by risks amid soaring interest rates and inflation which could affect consumer spending.

Arsenio Balisacan, Secretary of the National Economic and Development Authority (NEDA), said that the country’s economy would likely expand above the government’s growth target of 6.5-7.5% for 2022.

The third quarter saw the country’s GDP rise 2.9%, compared to the expected 1% rise and a 0.1% contraction in the previous quarter ending on 30th June this year.

Balisacan stated that although the developments were remarkable, he wanted to highlight that the country was still facing a significant burden in terms of high inflation.

A weaker peso led to higher import costs, driving inflation to an almost 14-year high last month and further ascertaining expectations of a rate increase for the sixth time during the Bangko Sentral ng Pilipinas’ (BSP) meeting due on 17th November.

Earlier this week, BSP said that it would be matching the US Federal Reserve’s 0.75% hike to support the peso, meaning a 75-bps rate increase is expected. So far this year, the Philippine peso has plunged 12.3% against the US dollar.

Despite the rate hikes, economic growth in the Philippines came at an average of 7.7% in the first nine months of 2022, boosted by the reopening of the economy as the government gradually lifted COVID-19 restrictions this year.

Balisacan noted that the government was committed to tackling inflation and protecting the people’s purchasing power, which included a tighter monetary policy.

He added that the Philippines could not afford to not adjust its rates along with those of the rest of the world.

Household consumption grew by 8% on-year in the third quarter, which, although slower as compared to Q2’s 8.6% growth, was faster than the previous year’s 7.1% in the same period.

Source credit:

About the author

Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.