Official says Southeast Asian financial system on monitor to fulfill authorities’s progress goal for 2022.
The Philippine financial system grew at a faster-than-expected clip within the third quarter, however the authorities mentioned the restoration shouldn’t be with out dangers given rising rates of interest and hovering inflation that might crimp client spending.
Underpinned by pent-up home demand, the financial system expanded 7.6 % within the third quarter from a yr earlier, official information confirmed on Thursday.
The financial system would doubtless develop above the federal government’s 6.5-7.5 % progress goal for 2022, financial planning secretary Arsenio Balisacan informed a media briefing.
On a quarterly foundation, gross home product (GDP) rose 2.9 % versus a 0.1 % contraction in April-June and an anticipated 1 % rise, the info confirmed.
“Whereas these developments are outstanding, I wish to underscore that our nation nonetheless faces a substantial burden within the type of excessive inflation,” Balisacan mentioned.
Rising import prices, aggravated by a weaker peso, pushed inflation to a close to 14-year excessive in October, cementing expectations of a sixth price enhance on the Bangko Sentral ng Pilipinas’ (BSP) assembly on November 17.
A 75-basis-point hike gave the impression to be within the bag after the BSP mentioned on November 3 it should match the Federal Reserve’s three-quarters of a share level price rise to help the peso, which has thus far misplaced 12.3 % towards the US greenback this yr.
Regardless of the sequence of price hikes, progress within the Philippines averaged 7.7 % within the 9 months to September helped by the complete reopening of the financial system as the federal government repeatedly lifted COVID-19 restrictions from early this yr.
Balisacan mentioned the federal government remained dedicated to preventing inflation to guard individuals’s buying energy, together with by tightening financial coverage.
“We can’t afford to not modify (charges) with the remainder of the world,” he mentioned.
Family consumption rose 8 % within the third quarter from a yr in the past, slower than the earlier quarter’s 8.6 % tempo however sooner than the 7.1 % progress in the identical interval final yr, the info confirmed.
“Within the face of surging costs, that’s an enormous upside shock,” mentioned ING economist Nicholas Mapa.
