Fitch Solutions, a unit of the Fitch Group, raised on Friday its 2022 gross domestic product growth forecast for the Philippines to 7.4 percent from 6.6 percent on the back of a strong 7.7-percent expansion in the first three quarters.
“The better-than-expected economic performance in the year-to- September has prompted us at Fitch Solutions to raise our 2022 growth forecast to 7.4 percent, from 6.6 percent previously,” Fitch Solutions said in a report.
Fitch Solutions, however, lowered its 2023 growth forecast to 5.9 percent from 6.2 percent on higher base effects and mounting growth headwinds from a quicker pace of monetary tightening and slowing global growth environment.
Economic Planning Secretary Arsenio Balisacan said the fact that the economy continued to perform and even accelerated in the third quarter “suggests a good deal of confidence in the administration.”
The Marcos administration’s move to further reopen the economy and loosen quarantine restrictions were the biggest contributors to the better-than-expected third quarter GDP and strong third-quarter corporate earnings, according to stock market analysts.
Regina Capital and Development Corp. managing director Luis Limlingan said the strong domestic spending, following the reopening of the economy and increased mobility, helped boost the domestic economy in the third quarter.
“Fortunately in our situation we are domestically driven, so the effects of the global economic slowdown had less on an impact versus other countries,” Limlingan said.
Data from the Philippine Statistics Authority showed that household consumption in the third quarter rose 8 percent despite the higher inflation.
President Ferdinand Marcos Jr. earlier promised to continue reopening the economy and assured the public that there would be no more lockdowns.
A more open economy and more relaxed mobility restrictions also boosted third-quarter earnings of most listed companies.
“Overall the fast growth we saw can be attributed to current state of the economy, which is more open compared to the same period last year,” Philstocks Financial analyst Japheth Tantiangco said.
“As restrictions eases, we had more robust flow of consumer and business activities, better confidence toward the economy,” Tantiangco said.
Property firms, restaurant operators and food and beverage firms reported strong rebound in third-quarter earnings, as people became more comfortable going out with the lowest alert level in place and the government lifted the mask mandate in open areas.
“As for the company earnings, they have been in line or surprisingly outperformed our expectations given the headwind brought about by inflation,” Limlingan said.
Listed firms also gave positive outlook on the remanding quarter of the year because of the seasonal uptick in spending during the holiday season.