Poll: Q3 GDP seen accelerating to 2.8% as spending picks up
The Philippine economy could snap a four-quarter streak of slowing growth in the third quarter on the back of improving government spending and resilient exports, though the expansion is likely to remain subdued amid continued weakness in domestic demand.
Gross domestic product (GDP) likely accelerated to 2.8 percent in the third quarter from the revised 2.4 percent in the previous quarter, according to the median estimate of 14 economists surveyed by the Inquirer.
If realized, this would mark the end of four consecutive quarters of slowdown and bring growth back to the pace recorded in the first quarter.
Still, the expected pickup would hardly amount to a broad-based recovery, with third-quarter growth likely to still be among the weakest expansions in 17 years outside the pandemic period.
It would also leave growth below the Marcos administration’s downgraded full-year target of 3.5 to 4.5 percent. Based on the first three quarters, average growth would stand flat at 2.6 percent.
The Philippine Statistics Authority, which revised the second-quarter growth upward from 2.3 percent, is scheduled to release the third-quarter GDP on Monday, Nov. 9.
Economists pointed to favorable base effects and improving government spending as key supports, while weak domestic demand is expected to continue weighing on growth.
“The year-on-year contribution from consumption should recover slightly but remain well below average—with household balance sheets still fragile, inflation hitting real incomes, and consumer confidence subdued,” Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said.
“Meanwhile, investment probably will return to the black after four straight quarters in the red, albeit thanks mainly to low base effects in fixed investment and continued inventory build,” Chanco added, estimating third-quarter growth at 2.6 percent.
Emilio Neri Jr., lead economist at Bank of the Philippine Islands, said the turnaround still “appears shallow and uneven.”
“External demand and government spending [are] doing most of the work while private domestic demand stays cautious,” Neri, who projected third-quarter growth at 3.2 percent, said.
“We expect growth to stay on a gradual recovery path into 4Q26, supported by favorable base effects, continued catch-up in government spending, and resilient electronics exports,” he added.
Neri said holiday spending could provide a seasonal lift to consumption, although this could still be offset by the slow recovery in public and private construction and lingering damage from back-to-back weather disruptions.
For Carlo Asuncion, chief economist at UnionBank of the Philippines, however, growth could slow further in the third quarter.
“Higher government consumption and resilient exports were likely offset by weak household consumption amid elevated inflation and softer labor conditions, subdued investment, cautious business spending and high borrowing costs,” Asuncion said, estimating third-quarter growth at 2.2 percent.
Asuncion noted that UnionBank’s third-quarter estimate would leave the Philippine economy needing roughly 7 percent growth in the final quarter just to reach the lower end of the government’s target.
“Stronger government spending, sustained exports, resilient remittances and holiday consumption could provide some lift, but persistent inflation, restrictive financial conditions, weak confidence and subdued investment remain significant downside risks,” he said.
******
Get real-time news updates: inqnews.net/inqviber
