Updated 14:47 PM PHT Sat, January 2, 2016
Metro Manila (CNN Philippines) — Good news: The country's economy picked up pace during the third quarter this year. Bad news: It has a lot of catching up to do to reach the government's full-year target.
Economic Planning Secretary Arsenio Balisacan announced on Thursday (November 26) that the gross domestic product (GDP) grew by an annualized 6.0 percent during the third quarter.
The figure is slightly higher than the 5.0 percent and 5.8 percent rates posted in first and second quarters, respectively. It's also an improvement from the 5.5 percent growth observed during the same quarter last year.
Balisacan pointed out that as of Thursday, the expansion was third fastest in Asia during the third quarter, following China's 6.9 percent and Vietnam's 6.8 percent.
Growth for the first nine months of the year now stands at at 5.6 percent.
At its current pace, the economy will have to grow by roughly 11.2 percent in the next three months to reach the government's full-year target of 7 percent to 8 percent.
Nevertheless, Balisacan believes that a 6-percent full year growth is "very much likely given even better prospects for the last quarter." For that to happen, he said that GDP growth in the fourth quarter needs to reach 6.9 percent.
"This growth trajectory we are seeing will likely to continue in the fourth quarter as we expect domestic demand to still pick up during the holiday season. This, along with low inflation, low oil prices, and the anticipated effects of election spending on the country’s growth, supports this outlook."
In a statement, the Philippine Statistics Authority said that third quarter growth was driven by a 7.3 percent expansion in the services sector. Its performance is the highest since the 7.4 percent figure during the third quarter of 2013.
Household consumption grew by 6.3 percent on the "availability of more jobs, increasing employment and income, low inflation and inflow of overseas Filipino remittances," Balisacan said.
The agriculture sector recovered with a 0.4 percent growth from Q3 2014's 2.6 percent contraction . On the other hand, the industry sector slowed down with a 5.8 percent growth compared to 7.8 percent during the same period last year.
Room for improvement
Balisacan reiterated the need to speed up infrastructure development "that has been neglected for so long."
He explained that doing so would not only buoy domestic demand but would also make the country more competitive globally.
"Our recent experience on infrastructure spending has shown us that it is not enough to just increase the money resources for infrastructure," he said. "It also requires improving our bureaucratic systems so that there is ample absorptive capacity."
Balisacan expressed optimism that the next administration would not find it difficult to traverse a higher growth path.
"The economy has yet to reach its peak and potential," he said. "What is important is that we do not lose sight of our goals, and we know the factors that have been holding back the economy from reaching its full potential."