The Philippines’ performance in Q3 is so excellent that it outshines the expectation. The Philippines’ GDP in July-September grew 6.2% compared to the last year’s third quarter, beating Reuters’ 6.0% forecast.
The advancement is due to wise government spending, slowing inflation, and a rise in farm outputs. For its excellent performance in the latest Q3, the Philippines is unlikely to ease its economic and trading policy, meaning good news from Duterte administration.
Despite being one of the quickest growing economies in Asia, the Philippines is not entirely safe due to the uncertain US-China trade war. To indubitably secure the economy, Manila needs to grow 6.7% in the final quarter, Economic Planning Secretary Ernesto Pernia says.
Albeit the excellent performance, the exports slow down for the first time in six months in September. Even worse, the imports are far from better for they have been declining for six months in a row.
“We don’t think Q3’s strong figures mark the start of a sustained rebound. On the plus side, consumption should continue to grow at a decent rate, helped in part by a sharp slowdown in inflation, which will have boosted consumers’ purchasing power,” said Alex Holmes, Asia economist at Capital Economics.
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Philippines Q3 and Stronger Philippine Peso
The Philippine Peso remains one of the most attractive Asian currencies this year. This year, the currency gains 3.8% against the US Dollar so far, remarking its continually growing value and demand.
Reportedly, many investors are currently hunting for a good return from Philippine Peso. One of the dominant factors that causing investors to hunt for yields from Philippine Peso is the high yield rates in Southeast Asia, in contrast to its counterparts.
The robust currency is all thanks to the narrowing trade deficit and the excellent GDP growth. Accordingly, the Philippines’ GDP growth outclasses its neighboring countries.
Since last year, the central bank has been continually cut rates to combat inflation. The attempt is considered successful as it attracts more investors to come in the process.
“Financial flows have been very beneficial to the Philippine Peso as real yields have attracted foreign players. With Bangko Sentral ng Pilipinas policy rates still relatively high in the region, this has attracted foreign money to PHL markets, helping prop the Peso,” said Nicholas Mapa, a senior economist at Dutch bank ING.
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