By Joe Zaldarriaga
Last week, the country’s statistics agency reported that the economy grew by 5.9 percent in the third quarter of 2023 on the back of increased public spending despite persisting inflationary pressures.
Major contributors to the improved third quarter gross domestic product were wholesale and retail trade, construction, and financial and insurance activities, government data showed.
The country’s third quarter performance is far better than the previous one with major economic sectors—agriculture, forestry and fishing, industry, and services—all recording expansions to make the Philippines the fastest-growing economy among major economies in Southeast Asia this year.
While global headwinds persist, the Philippines’ stellar economic performance in the third quarter is reassuring for businesses and investors—both local and international—and serves as a catalyst for an upbeat sentiment on the country’s situation.
The numbers and prospects are encouraging, and these are also likely to be sustained throughout the last quarter of the year with the expected boost in consumer spending during the holiday season. The government targets a full-year economic growth of 6 percent to 7 percent.
Economic optimism has also trickled down to the masses. Results of a Social Weather Survey released in October showed that nearly half or 46 percent of adult Filipinos are optimistic that their quality of life will improve in the next 12 months—far higher than the 5 percent who believe otherwise and the remainder who think it will be status quo.
According to Finance Secretary Benjamin Diokno, economic growth in the last quarter of the year will be supported by increased government spending and the rebound in manufacturing activities with the improved global economic outlook.
“The improving outlook for inflation, strong fiscal position, sound external conditions, and robust labor market, among other positive indicators, should pave the way for the expansion of activities of businesses, households, and the rest of the private sector,” Diokno said.
Overall, there is a prevailing positive economic outlook that propels a robust growth momentum. The challenge now is how we can take advantage of this to further strengthen efforts to better sustain economic growth at the national level.
Early on, the administration of President Ferdinand R. Marcos Jr. has already laid down enabling policies and programs for economic growth which can be leveraged by the private sector—a key partner in sustaining national development.
Given the current positive economic climate, it would be beneficial to foster stronger public-private partnerships that will help further develop an enabling environment for businesses and investors, as well as more favorable labor market conditions.
Some job opportunities, for example, are more prevalent during the holiday season due to increased demand for labor support in the service sector. By investing more in the country’s service sector, seasonal demand for service industry workers can be sustained to become a major economic contributor all year long, and not just during the holidays.
It will also be timely to capitalize on the positive economic sentiment to carry out wide scale modernization programs in the agriculture sector given that its development is a priority of President Marcos Jr. Implementing modernization programs and increasing investment in the agriculture sector will not just contribute to economic growth, it will also help ensure national food security, result in more job opportunities, and bring development faster to the countryside.
Moving forward, the country can benefit from leveraging on the prevailing conducive economic climate and the enabling investment environment under the Marcos Jr. administration if the government and the private sector work closely together.
Achieving and sustaining continuous economic growth rests on the collective and complementing efforts of both the government and the private sector, that, if realized, will benefit not just a select few but the entire country.