PH economy grows 6.9% in third quarter

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Story updated to include statement of Presidential Spokesperson Harry Roque.

Metro Manila (CNN Philippines, November 16) — Stronger exports and better government spending were the top contributors to the 6.9-percent growth of the Philippine economy in the third quarter, according to Socioeconomic Planning Secretary Ernesto Pernia.

"(These) then boosted the manufacturing subsector and the services sector," Pernia said in a Thursday press conference. "We are likely to rank second in Asia (this quarter), next to Vietnam's 7.5 percent and ahead of China's 6.8 percent and Indonesia's 5.1 percent."

The third-quarter gross domestic product (GDP) growth rate is up from the 6.7 percent recorded in the second quarter, which the government had originally pegged at 6.5 percent.

Read: Philippine economy grows 6.5% in second quarter

However, the figure is slightly lower than the 7.1 percent recorded in the third quarter of 2016.

Pernia said with this year's average GDP growth rate at 6.7 percent, the government is "confident" that it will meet its 6.5-to-7.5 percent target for 2017.

GDP represents the total value of all the goods and services produced in the Philippines within a certain period. It serves as a gauge of a country's economic health.

Presidential Spokesperson Harry Roque said in a Thursday media briefing that the figure is a result of "stability" that the Philippines is enjoying.

"It's stability that brings about predictability, which brings out business confidence, investor's confidence," he said. "And that can be attributed to President Duterte's administration."

COL Financial Research Head April Lee Tan told CNN Philippines on Thursday that the stronger GDP numbers generally mean wealthier Filipinos, on average, as well as more jobs.

Pernia added that there is now "sustained improvement in government spending" as the government undertakes its ₱9-trillion "Build, Build, Build" infrastructure program.

"This is expected to ratchet up public spending even further," he said.

The program aims to put up big-ticket infrastructure projects like the ₱355-billion Metro Manila Subway, a railway that will run from Mindanao Avenue in Quezon City to the FTI complex in Taguig City, with an additional line extending towards the Ninoy Aquino International Airport terminals in Pasay City.

Read: Metro Manila subway project gets greenlight

Faster GDP growth ahead

Meanwhile, Finance Secretary Carlos Dominguez III said he expects the country to grow faster in the succeeding quarters as the government ramps up its infrastructure spending.

"Expect a more riveting growth narrative in the fourth quarter and onwards as the Duterte  administration shifts to higher gear its unparalleled investment and stimulus program on the strength of  the government's greater absorptive capacity and its resolve to advance its 'Build, Build, Build' infra program as the main driver of the economy," he said in a Thursday statement.

Tan said she "totally agrees" with Dominguez.

"The criticism of the previous administration was that it lagged in government spending, although it saved a lot of money," she said. "The private sector was the one doing all the spending. This third quarter, the government is slowly showing that it is doing the heavy lifting and playing a role in the country's growth.

Dominguez added that the country will maintain "fiscal discipline" in light of the revenue expected from official development assistance, which is financial aid given from one country to another, and the government's proposed tax reform bill.

Related: P9-trillion infrastructure program will not drive PH into debt: Budget Department

Tan said she doesn't expect long-term financial problems to arise from the "Build, Build, Build" program.

"On a long-term basis, they will make sure to contain GDP deficit within the 3 percent range," she said. "As long as the GDP growth remains high, the debt-to-GDP ratio will not accelerate," she added.

Debt-to-GDP ratio pertains to how much debt a country has in relation to how much it produces. A low debt-to-GDP ratio signifies that a country can more easily pay back its debt.