MANILA, Philippines – The Philippine economy expanded 6 per cent in the third quarter and officials Thursday forecast at least the same growth rate for the full year but warned of risks from the El Nino dry spell and presidential elections in 2016.
Service industries which include real estate and retailing were the main driver of growth in the third quarter, expanding 7.3 per cent, which was the fastest pace since 2013. Agriculture showed signs of recovery, growing 0.4 per cent compared with a contraction a year earlier.
The Philippines has been one of the best performing economies in Asia for several years, growing at an average rate of 6.3 per cent between 2010 and 2014. Despite increased government efforts to raise living standards, the country still faces considerable challenges including its vulnerability to typhoons and other natural disasters, poverty, corruption and poor infrastructure.
Officials said risks to the growth outlook include El Nino’s effect on agriculture and potential political uncertainty as President Benigno Aquino III’s six year term draws to a close. Elections are set for May.
“We are confident that after five years we have laid our house with firmer foundations,” said Finance Secretary Cesar Purisima. “But reform is a game that has no end. Increasingly we look to our next set of leaders to carry the work of charting our future.”
He said the government’s 2016 budget will meet its goal of investing five per cent of gross domestic product in infrastructure.
Weakness in the global economy hurt trade in the third quarter. The Philippines posted a trade deficit of 58.8 billion peso ($1.25 billion) for the three months compared with a surplus of 7.3 billion pesos ($155.3 million) a year earlier.
Economic Planning Secretary Arsenio Balisacan said growth of 6 per cent for the full year is “very likely” because of an expected acceleration in the fourth quarter.
Second-quarter growth was revised to 5.8 per cent from 5.6 per cent.