The end of the budget deadlock and government election spending spurred growth.
The Philippines posted real GDP growth of 6.2% YoY in Q3 2019 mainly due to the end of the budget deadlock and government spending during the May midterm elections, according to a Maybank Kim Eng research.
The construction sector boomed 16.3% YoY in Q3, emerging from its -0.5% YoY decline in the previous quarter, as private construction remained strong at 19.1% YoY and public construction rebounded at 11% YoY in Q3. Manufacturing sector softened to 2.4% YoY and services sector growth slowed to 6.9% from 7.1% in Q2.
Growth in agriculture bounced back to 3.1% as mining lowered to -4.9% YoY from 14.6% in Q2. Domestic demand growth surged to 5.5% due to better private (5.9%) and government consumption (9.6%). Gross fixed capital also rebounded to 2.1% YoY from -4.6% in Q2, reflecting the end of the country’s 2019 budget deadlock and ban on government spending during the elections.
Household loans growth bloomed 13.3% YoY in July to August amidst the positive impact from slowing inflation and the monetary board’s policy easing through interest rate and reserve requirement ratio (RRR) cuts.
Maybank Kim Eng retains its full-year 2019 growth forecast of 6.0% as analysts expect the stimulus growth from monetary easing and government spending to have a positive impact on the foreseen growth of 6.5% YoY for Q4.
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