Economic Growth Continues to Accelerate

Economic Research	18 November 2016
Philippines
Economic Highlights
Economic Growth Continues to Accelerate The Philippines’ real GDP growth inched up to 7.1% y-o-y in 3Q 2016, from +7.0% recorded in 2Q and compared with +6.8% in 1Q, bolstered by a larger net export. Domestic demand growth moderated to 10.6% y-o-y in 3Q 2016, from +11.7% in 2Q, underpinned by a slowdown in investment and household & government consumption after the election period. Growth of real exports of goods & services, likewise, weakened to 8.8% in 3Q, from a revised 10.0% in 2Q. In the same vein, growth of real imports of goods & services eased to 14.2% y-o-y in 3Q, from +23.2% in 2Q. Sharper moderation in imports than that of exports resulted in bigger net exports. On the supply side, the pick-up in GDP growth was led by acceleration in the manufacturing, construction, and financial intermediation output and a rebound in agriculture activities. In addition, mining output recorded a smaller contraction. A slowdown in utilities, transport, trade, real estate, public administration and other services activities, however, partly offset those gains. Going forward, we envisage the Philippines’ real GDP to expand by 6.8% in 2017, strengthening from +6.6% estimated for 2016, on the back of further acceleration in public and private consumption. However, a more moderate increase in investment will likely cap the upside due to a taper off of electionrelated spending and weaker exports. Economist:  Rizki Fajar  | +6221 2970 7065