Analysts expect slower October inflation, faster Q3 economic growth

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Metro Manila (CNN Philippines, November 2) — Inflation and growth numbers will be out next week.

Analysts polled by CNN Philippines anticipate that price rates will be slower in October, economic growth figures for the third quarter will fit the government's revised targets, and interest rates could be hiked.

Data collected from economists and analysts show inflation could have tapered off in October, falling at an average of 6.6 percent and mirroring the expectations of the Bangko Sentral ng Pilipinas (BSP).

  • 7.0% Ernesto Gonzales, UPM
  • 6.9% Emmanuel Leyco, AIM
  • 6.8% Emmanuel Lopez, Letran Grad School
  • 6.7% Guian Dumalagan, Landbank
  • 6.6% Carlo Asuncion, Unionbank
  • 6.6% Alvin Ang, ADMU
  • 6.6% Michael Ricafort, RCBC
  • 6.5% Mitzie Conchada, DLSU
  • 6.5% Nicholas Mapa, ING Bank
  • 6.5% Bernardo Villegas, UA&P
  • 6.0% Leah Estacio-Tiu, Corpecon Research

"This is because supply of rice and other food products have stabilized and prices have gone down as well," said Alvin Ang from the Ateneo Center for Economic Research and Development.

 

However, given the onslaught of typhoon Rosita and its impact on agriculture, some analysts are expecting the BSP to hike interest rates anew in November or December to keep prices in check.

As for economic growth, the poll results show a median forecast of 6.5 percent gross domestic product expansion for the third quarter. This is in line with the revised government target of 6.5 to 6.9 percent for the year.

  • 6.7% Guian Dumalagan, Landbank
  • 6.6% Carlo Asuncion, Unionbank
  • 6.5% Ernesto Gonzales, UPM
  • 6.5% Emmanuel Lopez, Letran Grad School
  • 6.5% Bernardo Villegas, UA&Pl
  • 6.4% Michael Ricafort, RCBC
  • 6.3% Nicholas Mapa, ING Bank
  • 6.1% Alvin Ang, ADMU
  • 5.9% Mitzie Conchada, DLSU
  • 5.8% Emmanuel Leyco, AIM

While this is higher than the 6.0 percent growth in the second quarter, it is lower than the 7.0 percent growth posted for the third quarter last year.

"The Philippine economy likely gained momentum in the third quarter, growing by about 6.7%, on the back of faster gains in most spending components. Government spending picked up, along with investment spending, supported by the Build Build Build program of the government," said Landbank market economist Guain Dumalagan.

He added that the government should improve the agriculture sector, which dragged down growth because of its dismal performance.

The Philippine Statistics Authority (PSA) is set to announce the October inflation figures and the third quarter gross domestic product next week.

CNN Philippines' Jil Danielle Caro, Luchi de Guzman and Rex Remitio contributed to this report.