Capital Economics senior Asia economist Gareth Leather says Philippine GDP
growth slowed in Q3, driven mainly by a household spending squeeze from higher
energy prices, though signs indicate the corruption-related drag is receding.
Other Q3 components, notably exports, were more encouraging. The government is
pushing to restart stalled infrastructure projects but may tighten fiscal policy
to rein in a rising debt-to-GDP ratio; investment appears past its worst but
recovery could be slow amid weak corporate confidence. Capital Economics
forecasts roughly 3.0% GDP growth this year and says the weakness supports the
view that, despite rising inflation, the central bank may have finished its
tightening cycle.
