THE research arm of a major credit-rating agency cited the government’s reluctance to spend in the third quarter as the main factor that likely dragged down growth during the period.
In reviewing economic data from countries in the region, Moody’s Analytics on Friday said the $270-billion economy might have expanded at a slower rate in the third quarter to only 5.9 percent.
“In the Philippines, a slowdown in public-infrastructure spending likely curbed third-quarter growth,” the research arm of the sovereign credit watcher said.
Earlier this week, the minutes of the latest Monetary Board meeting indicated an economy facing so-called downside risks as direct consequence to the lower public-sector spending during the period.
A regional banking giant, likewise, revised its growth forecast for the country in the third quarter for basically the same reasons cited by Moody’s Analytics.
“The flow of new government infrastructure projects slowed, which may weigh on gross domestic product growth. Conversely, export grow has accelerated and imports have improved, reflecting a stronger domestic economy,” Moody’s Analytics said.
“Industrial production, the best monthly gauge of overall growth, slowed in the three months to September. The Moody’s Analytics tracking model suggests a modest third-quarter slowdown,” the research arm added.
Despite the slower forecast growth, however, the researchers at Moody’s Analytics said the economy continued to grow strongly during the period.
“The Philippines’s economy grew strongly through the third quarter of 2014. Production has fully recovered from last year’s typhoon and business sentiment remains upbeat,” the Moody’s unit said.
The Philippine Statistics Authority is scheduled to release the country’s third-quarter growth numbers next week.
In the first six months, the economy grew by 6 percent, on the back of strong domestic demand.