MANILA – The government on Thursday revealed that the growth of the Philippine economy is not at par with their expectations after it slowed down by 5.3 percent in the third quarter compared to last year’s achievements.
The said number is also lower than the growth compared with the second quarter of this year and well-below the expectations of analysts. Moreover, it is the slowest since last quarter of 2011.
“The third quarter economic performance shows a mixed picture of the private sector treading a more stable upward trajectory, government adjusting to new spending protocols, and then, the lingering negative impact of typhoon Yolanda and other calamities,” said Socio Economic Secretary Arsenio Balisacan.
For this quarter, growth was driven by manufacturing, trade, real estate, renting & business activities and construction. Meanwhile, slowdown was seen in financial intermediation and contraction in agriculture and public administration.
Another factor that affected the economy’s growth during the third quarter was because of the under-spending of the government following the issue over the Disbursement Acceleration Program.
“Most of the delays were due to lags in the submission of documentary requirements by the concerned agencies. Although this year, the GAA is now considered a release document, for certain big ticket items, the GAA stipulates certain conditions prior to budget release,” he said.
Moreover, weakness in the agriculture sector also dragged the economy down. Spending dropped to 2.7 percent, while crop production underwent losses from palay, cord, and other crops.
“Palay production was adversely affected by typhoons Glenda and Luis, onset of habagat. Regarding coconut, farms in the Visayas are yet to recover from Typhoon ‘Yolanda’ in addition to the scale insect infestation,” Balisacan said.
With this, the GDP is expected to be at 5.8 percent. According to Balisacan, meeting the government’s target of 6.5 to 7.5 percent will now be a “big challenge.”
“Admittedly, even hitting the low-end of the target growth rate for the year pose a big challenge. We need to grow by at least 8.2 percent in the fourth quarter, and we at the DBCC will brainstorm intensively on how we can come as close to this figure as possible,” he said.
But, he remains upbeat that the economy might recover.
“Expect the private sector to maintain our robust performance. Government will have adjusted to the new protocols, and we see this in the most recent preliminary data coming from the DBM… The reconstruction assistance in Yolanda-affected areas is already gaining traction,” he said.