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Gov’t ups Q3 GDP growth estimate;
Moody’s Analytics sees Q4 slowdown

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Household spending has remained a key driver of gross domestic product growth.

OVERALL ECONOMIC GROWTH can be expected to have picked up in the fourth quarter from a year ago, though expansion could have eased from the preceding three months, Moody’s Analytics said in a note on Friday, placing the full-year pace comfortably within the government’s 6.5-7.5% target.

The Philippine Statistics Authority (PSA) is scheduled to report fourth-quarter gross domestic product data on Jan. 23.

Economic expansion in 2017’s third quarter grew faster than initially reported, the government reported in a statement also on Friday.

The PSA said its latest estimate shows GDP — which measures the value of final goods and services produced in a country — expanded by 7.0%, slightly higher than 6.9% initially.

The slightly upgraded July-September estimate kept the average of 2017’s first three quarters at 6.7%.

Among the sectors that recorded significant revisions according to the PSA were three subsectors, namely: manufacturing (revised to 10% from 9.4%); trade and repair of motor vehicles, motorcycles, personal and household goods (7.1% from 6.8%) and mining and quarrying (6.1% from 4.6%).

In its Asia-Pacific Economic Review covering next week, Moody’s Analytics said it expects Philippine GDP growth expansion to have clocked 6.7% in 2017’s final quarter, slower than the preceding three months’ upwardly adjusted 7.0% but still faster than the year-ago 6.6%.

“Domestic demand likely remained the major driver of growth, with exports also providing lift thanks to strong demand for electronics and components,” Moody’s Analytics said in its note.

The first two months of 2017’s fourth quarter saw merchandise exports grow 4.35% year-on-year to $10.355 billion, PSA data show.

Noting that “[t]he Philippines’ economy has been a standout in recent years, underpinned by strong domestic demand and favorable demographics”, Moody’s said enactment last Dec. 19 of Republic Act No. 10963 — the first of up to five planned tax reform packages cumulatively designed to make taxation fairer and yield more revenues — provided additional impetus to growth prospects.

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