By Joann Santiago
MANILA, Nov. 26 (PNA) — Moody’s Analytics forecasts an “above-potential” growth for the Philippine economy in the third quarter of 2013 at seven percent.
The projection is lower than the 7.5 percent print in the second quarter and the 7.6 percent growth in the first half of the year but the research note expects growth from July to September this year to remain solid.
The research note of Moody’s Corporation’s division that provides economic and consumer credit analysis cited that even as expansion of the domestic economy in the third quarter was projected to have slowed “it won’t have slowed by much and will still show the economy growing above potential.”
Moody’s Analytics’ third quarter growth forecast for the Philippines is at the higher end of the government’s six to seven percent growth, as measured by gross domestic product (GDP), target for 2013.
The research note said the combination of strong industrial production, manufacturing and construction are all expected to contribute positively on the expansion of the domestic economy.
For one, the construction sector got a lift from the continued increase of government infrastructure projects along with the rise in residential buildings
Moody’s Analytics cited that roll-out of the various projects like roads, railways, and utilities “has been proceeding at a steady pace.”
It, however noted that, “spending on these projects can be lumpy and construction will likely slow from its 20 percent surge in the June quarter.”
On the other hand, financing of private sector construction continues and the report noted that condominium prices have doubled since 2004.
“This is driving greater residential construction in metro areas, while continued growth in offshore remittances supports construction and consumer demand across the archipelago,” it said.
In terms of the impact of recent calamities on the economy, Moody’s Analytics said it has no data yet on the economic impact of these events but it sees growth to remain robust due to “broad-based growth and rising potential.”
“The government has its finances in order and with the economy and tax revenues growing strongly, it can reasonably afford the typhoon’s large repair bill,” it said.
The report said that sans the calamities “there is a lot to like about the medium- and long-term outlook of the Philippines’ economy.”
“The government is on a steady path of reform and is encouraging investment. Investors are likely to stay put, preferring to focus on the longer-term fundamentals of one of Asia’s recent success stories,” it added.
The government is scheduled to release the third quarter output report for this year on Thursday. (PNA)