MANILA: Philippine economic growth beat expectations in the third quarter despite soaring inflation, officials said Thursday, spurred by an increase in household spending as people get back to “pre-pandemic life.”
Gross domestic product rose 7.6 percent, beating expectations of 6.3 percent as well as the seven percent growth seen in the same quarter last year, Socioeconomic Planning Secretary Arsenio Balisacan said at a briefing.
The surprising performance was driven by increased spending on restaurants, hotels and travel, as well as investment, as schools restarted face-to-face classes and Covid-19 restrictions were lifted.
“This turnout signifies that Filipino families are close to returning to pre-pandemic life,” Balisacan said.
“Having been deprived of mobility for two years, you just want to go out and see the world again.”
But he warned the country faced a “considerable burden” from high inflation and the impact of recent tropical storms that badly damaged crops.
Inflation hit 7.7 percent in October, the highest in nearly 14 years, due to surging food prices.
Like central banks around the world, Philippine monetary policymakers have flagged further interest rates were needed to tame inflation.
“The economy could have been stronger (in the third quarter) if not for this inflation,” said Balisacan.
The country was on track to meet the government’s annual growth target of 6.5 to 7.5 percent, he added.
London-based Capital Economics expects Philippine growth to slow in the coming months as the higher cost of living and weaker global demand bite.
“We think economic growth will slow from seven percent this year to just five percent in 2023,” said Gareth Leather, senior Asia economist.