The country’s gross domestic product (GDP) increased by 5.9% year on year or better than the consensus estimate of 4.7% and the 4.3% growth recorded in the 2nd quarter. Breaking it down into major economic sectors, agriculture, industry, and services all showed positive growth. <\/p>\n\n\n\n
Agriculture grew by 0.9%, industry by 5.5%, and services by 6.8%. On the demand side of things, personal consumption expenditures (PCE) grew by 5.0% and government final consumption expenditure (GFCE) was up by 6.7%. The latter managed to turnaround from the 7.1% contraction in the previous quarter. Meanwhile, investments remained weak as gross capital formation declined by 1.6%. Gross national income (GNI) grew by 12.1% as net primary income from the rest of the world saw a growth of 112.5%.<\/p>\n\n\n\n
Our View: <\/strong>The Philippines’ impressive performance in the third quarter has solidified its position as one of Asia’s fastest-growing economies, surpassing nations like Vietnam (5.3% growth), Indonesia (4.9%), and Malaysia (3.3%). <\/p>\n\n\n\n However, achieving the government’s modest 6% annual growth target will demand a strong final push. Given that the economy has already achieved 71.7% of the lower-end target after nine months, there is a glimmer of hope. Historically, the fourth quarter has been robust, contributing around 28.5% of the full-year GDP with an average quarterly growth of 17.1%. <\/p>\n\n\n\n Yet, a significant challenge looms in the form of consumer spending. While inflation is moderating, it remains a persistent concern, eroding consumer purchasing power. Although personal consumption managed a 5% growth last quarter, it notably lagged behind the 8% expansion observed in the second quarter. High borrowing costs and ongoing geopolitical tensions are undermining consumer confidence. <\/p>\n\n\n\n Consequently, we project the 2023 GDP growth to reach 5.7%, narrowly missing the 6% lower-end target.<\/p>\n\n\n\n