By Oyintari Ben
The third quarter of the Philippine economy had greater growth than anticipated, but the government warned that the recovery posed risks due to rising interest rates and skyrocketing inflation that could restrain consumer spending.
The economy grew by 7.6 percent in the third quarter compared to a year earlier, according to official figures released on Thursday. This growth was supported by pent-up domestic demand.
Economic planning secretary Arsenio Balisacan stated during a media briefing that the economy would likely grow faster than the government’s 6.5-7.5 percent growth objective for 2022.
According to the figures, the gross domestic product (GDP) increased by 2.9 percent on a quarterly basis as opposed to a 0.1 percent decrease from April to June and an anticipated 1 percent increase. Although these advances are impressive, Balisacan emphasized that our country still has a significant burden due to excessive inflation.
Inflation reached a nearly 14-year high in October as a result of rising import costs and a weaker peso, which increased expectations of a sixth rate rise at the Bangko Sentral ng Pilipinas (BSP) meeting on November 17.
After the BSP announced on November 3 that it will match the Federal Reserve’s rate increase of three-quarters of a percentage point in order to strengthen the peso, which has lost 12.3 percent against the US dollar this year, a 75-basis-point increase seemed to be a lock.
Despite the ongoing rate increases, the Philippines’ economy grew by an average of 7.7 percent in the nine months that ended in September, thanks in large part to the government’s ongoing lifting of COVID-19 limitations and the economy’s complete reopening.
In order to preserve the purchasing power of the populace, Balisacan stated that the government was dedicated to combating inflation, including through tightening monetary policy.
We can’t afford to keep up with the rest of the world’s rate adjustments, he remarked.
According to the data, household consumption increased by 8% in the third quarter compared to the same period a year earlier, which was greater than the same period’s 7% rise but slower than the previous quarter’s 8.6% pace.
