Despite "major headwinds" the Philippine economy grew faster at 5.9 percent in the third quarter, National Economic Development Authority (NEDA) Secretary Arsenio Balisacan announced on Thursday.

"We are pleased to announce that the Philippine economy continues to grow despite several major headwinds that we have experienced and continue to experience. The year-on-year 5.9 percent (gross domestic product)GDP growth in the third quarter of 2023 is a marked improvement from the 4.3 percent growth in the second quarter," he said.

"This performance makes our economy the fastest among the major emerging economies in Asia that have released their third-quarter 2023 GDP growth: Vietnam at 5.3 percent, Indonesia and China at 4.9 percent, and Malaysia at 3.3 percent," he noted.

Balisacan said "the growth acceleration puts the GDP growth rate for the first three quarters - January to September - of 2023 at 5.5 percent."

He stressed the need for the economy to grow by 7.2 percent year-on-year for the fourth quarter to attain at least the low end of the government's target of 6 percent to 7 percent for the entire year.

"GDP growth in the third quarter was broadly based, with all major economic sectors posting growth, with agriculture growing at 0.9 percent, industry at 5.5 percent, and services at 6.8 percent," he explained.

Balisacan also mentioned that "from the expenditure or demand side of the economy, domestic demand—the sum of household final consumption spending, government final consumption expenditure, and gross capital formation or investment--improved to 3.9 percent in the third quarter of 2023 from 2.2 percent in the previous quarter."

"External demand or net exports, on the other hand, increased by 12.9 percent in the third quarter, up from 8.5 percent in the second quarter of 2023," he said.

He added that the "household consumption growth slowed down year-on-year to 5 percent in the third quarter of 2023 from 5.5 percent in the previous quarter as food inflation increased to 8.2 percent in the third quarter from 7.4 percent in the second quarter of 2023. Nevertheless, the seasonally adjusted quarter-on-quarter growth of household consumption was solid at 4.8 percent."

Balisacan added "that non-monetary measures to protect the purchasing power of Filipinos remain crucial" as the government continues to address the issue of high inflation.

"Hence, the proactive role of the Inter-Agency Committee on Inflation and Market Outlook is critical in effectively managing the supply and demand situation of various commodities in the country," he said.

Balisacan said the "acceleration of public spending in the third quarter is notable, tempering the decline of overall gross capital formation."

"Year-on-year growth of Government Final Consumption Expenditure rose to 6.7 percent in the third quarter from negative 0.7 percent in the second quarter," he said.

"Similarly, Government Fixed Capital Formation growth increased to 26.9 percent in the third quarter from 0.7 percent in the second quarter. Overall, government spending contributed 2.1 percentage points or 36 percent of the observed 5.9 percent GDP growth," he noted. Robina Asido/DMS