Balisacan confident of better economic performance in Q4

Metro Manila, Philippines — Socioeconomic Planning Secretary Arsenio Balisacan expressed optimism that the Philippines would post a better economic performance in the October-December period than the previous quarter.

The country’s economy grew 5.2% year-on-year in the third quarter, slowing down from 6.4% in the second quarter, and from last year’s 6%. It was attributed to the contraction in farm output.

Balisacan acknowledged that the agriculture sector, among the key sectors of the economy, was “badly hit” in the fourth quarter, especially coming from the successive storms that started in October.

“We expect negative growth for the entire year, for the full year for agriculture,” the National Economic and Development Authority (NEDA) chief told reporters in his year-end press chat on Friday, Nov. 29.

Despite this, Balisacan said there are “positive forces” that could outweigh the developments seen for the agriculture sector.

“Holiday spending, more stable commodity prices, and a robust remittance inflow and labor market give us confidence that our 6% to 7% growth target is still achievable,” he said.

“I think all of these make me believe the fourth quarter would be better than the third quarter,” he also said.

‘Good chance’ for upper middle-income status

Balisacan also reiterated his belief that the Philippines would attain the upper middle-income country status in 2025, stressing that the country has a “good chance.”

“Attaining this status will require that we achieve our growth target this year, that we maintain our growth trajectory in 2025, and our currency will not weaken significantly relative to the currencies of our major trading partners,” he said in his speech.

Income classifications come from the World Bank, based on the gross national income (GNI), or the total income earned by a country’s people and businesses.

A lower middle-income economy means it has a GNI per capita of $1,146 to $4,515 (around P67,000 to P264,000). Upper middle-income countries have a GNI per capita of $4,516 to $14,005 (around P264,000 to P821,000).

Balisacan said that the Philippine’s GNI has grown faster than the gross domestic product, which measures the monetary value of final goods and services produced in a country.

An implication for the upgraded status would be losing Official Development Assistance privileges. ODA are loans or loan grants that fund social and economic development projects in the country.

“We are assured, talking with our development partners, at least for the near-term, we continue to have access to similarly attractive loans,” he told reporters.

BSP’s November inflation forecast

The Bangko Sentral ng Pilipinas (BSP) ​said the rate of the price increase in basic goods and services may settle within 2.2% to 3% in November.

The Philippine Statistics Authority reported a 2.3% inflation print in October.

“Increased prices of vegetables, fish, and meat due to unfavorable weather conditions, higher electricity rates and petroleum prices, and the depreciation of the peso are the primary sources of upward price pressures this month,” the BSP said. “These are expected to be offset in part by lower prices of rice.”

Balisacan said NEDA also does not see “substantial increases” in prices.

“We are not seeing major disruptions…saka si [And Agriculture Secretary Francisco Tiu Laurel Jr.] was telling us two days ago, for those commodities that are likely affected, they are bringing in the supply like fish for example,” he said.