GDP growth slows in third quarter on drag from agriculture

ABS-CBN News

Posted at Nov 08 2018 10:25 AM | Updated as of Sep 03 2019 03:01 PM

Strawberry and vegetable farms in La Trinidad, Benguet are seen damaged a day after the onslaught of typhoon Ompong (Mangkhut) on Sept. 16, 2018. Jire Carreon, ABS-CBN News

MANILA -- Gross domestic product grew 6.1 percent in the July to September period, dragged by a decline in agriculture output, official data released Thursday showed.

Economic growth in the third quarter slowed from 6.2 percent in the previous quarter and was below the 6.3 percent expectation of analysts in a Reuters poll.

Still, 14 consecutive quarters of at least 6 percent growth shows the Philippines is "now on a higher growth path," Socioeconomic Planning Secretary Ernesto Pernia said.

"We are not exactly exuberant about the 6.1-percent growth rate, but still comforted that we still remain one of the fastest growing economies in Asia," Pernia told reporters.

ABS-CBN Data Analytics

Pernia said he was "concerned" over the slowdown in household consumption, which he described as "temporary." Government measures to tame inflation are in place and price spikes in food have begun to soften in October, he said.

Agriculture declined 0.4 percent in the third quarter, the first contraction since the fourth quarter of 2016. Services grew 6.9 percent while industry expanded by 6.2 percent, the Philippine Statistics Authority said.

Pernia blamed the contraction in agriculture in part to recent storms and late planting of crops.

Services contributed 4.1 points to to the third quarter GDP print, industry added 2.1 points while agriculture shaved 0.3 point, the PSA said.

ABS-CBN Data Analytics
ABS-CBN Data Analytics

Growth in the April to June period was below market and government forecasts, dragged by inflation and the closure of Boracay island. The country's main tourist draw reopened on Oct. 26.

With the economy growing at a faster clip, and with inflation staying at near 10-year peaks, the Bangko Sentral ng Pilipinas will have room to raise interest rates for a fifth straight policy meeting on Nov. 15, analysts said.

Annual inflation was unchanged at 6.7 percent in October from the previous month, data released Tuesday showed, the first time the rate has steadied this year, but it surpassed the median 6.5 percent forecast in a Reuters poll.

The Bangko Sentral ng Pilipinas has raised interest rates in its last 4 consecutive meetings by a total of 150 basis points, bringing its benchmark rate to 4.5 percent to slow inflation and meet its 2-4 percent target next year.

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