MANILA: The Philippine economy slowed for a fifth straight quarter in the July-September period, weighed down by weaker household and government spending and a contraction in agriculture, putting the country on course to miss its growth target for the year.
Gross domestic product grew 2.1% in the third quarter, slowing from the previous quarter's upwardly revised 2.4% growth and remaining around its weakest pace in more than five years. A Reuters poll forecast growth at 3.0%.
On a seasonally adjusted, quarter-on-quarter basis, the economy grew 0.1% in the July-September period, down from 0.6% in the previous quarter
The economy will need to grow 6.3% in the fourth quarter to reach the lower end of the government's 3.5% to 4.5% full-year growth target, Economic Planning Secretary Arsenio Balisacan said in a press conference, after growth averaged 2.5% in the first nine months.
Achieving that pace will be challenging as elevated inflation threatens to further curb household demand, a key driver of the Philippine economy. Annual inflation accelerated to a more than three-year high of 7.8% in October and Balisacan said consumer prices were likely to remain elevated due to higher food and fuel costs.
Household spending slowed for a fourth consecutive quarter in July-September to 2.4% and government consumption eased to 6.8% from 8.3% in the previous quarter.
Contributing to the economy's lacklustre performance was the 4.8% contraction in farm output, reversing growth of 2.9% in the June quarter.
Balisacan said the government's 5% to 6% growth target next year remained achievable but would require strong investment, easing price pressures and recovery in business confidence, which has been battered by a corruption scandal involving flood control projects.
Government infrastructure spending contracted for a sixth straight quarter in the third quarter, falling 15.1% compared with a 33.4% decline in the second quarter.
The Bangko Sentral ng Pilipinas has already raised interest rates by a total of 125 basis points since April, including last month's larger-than-expected 50-basis-point hike, to rein in inflation, pushing up borrowing costs and adding another headwind for growth. - Reuters
