MANILA, Philippines (UPDATE) - The Philippine economy likely grew at least 3.8% in the third quarter from a year earlier, supported by a strong services sector, a senior government official said on Wednesday, bolstering the case for the central bank to leave interest rates unchanged at next week's policy meeting.
Annual growth in that range in July-Sept would be faster than the second quarter's 3.4 percent rise, despite signs that the global economy is faltering.
"The estimate ... is 3.8 to 4.8 percent," said Ruperto Majuca, assistant director general of the economic planning agency. "It could even be a little bit higher, I feel, because of the leading economic indicators."
Official third-quarter growth data is set to be released on Nov. 28, three days before the central bank meets to set policy rates. Most analysts expect the monetary authority to keep rates steady at 4.5% into 2012.
"The services sector will be the main driver for growth," Majuca said, adding that the real estate, tourism, and the financial services sectors were expected to show a healthy expansion.
A strong farm sector, which accounts for a fifth of gross domestic product, is expected to support overall growth, with agricultural output rising an annual 4.28% in the first nine months to reverse a year-ago contraction.
Robust remittances from Filipinos working and living overseas should support consumption and overall growth, despite the global economic slowdown, Majuca said.
Remittances in the first nine months of the year reached nearly $14.8 billion, up 7.1% from a year ago, with inflows in September alone matching a monthly peak hit in June.
The central bank has said there was no need to cut rates for now as the growth momentum was likely to be sustained and money supply was adequate.
Some central banks in emerging economies have moved to an easier policy stance in recent months as global risks mount and inflationary pressures ease.
Indonesia slashed rates by a total of 75 basis points in two meetings in a row, while Thailand is expected to cut rates this month after its economy grew much less than expected in the third quarter.
Brazil has also cut rates to sustain growth as the global expansion falters.
The Philippine government trimmed its growth forecast to 4.5% to 5.5% from 5% to 6% this year, but economists in a Reuters poll in October predicted growth will be slower at 4.3% in 2011.
GDP growth hit a three-decade peak of 7.6% in 2010.