MANILA, Philippines - The country's economy is expected to have grown by 5.5% in the third quarter, driven by public spending and foreign investments, Moody's Analytics said on Tuesday.
"The country's GDP (gross domestic product) increased an estimated 5.5% y/y (year-on-year), only slightly below the second quarter’s 5.9% pace," Katrina Ell, associate economist at Moody's Analytics, said in a commentary.
"The Philippines is expanding above its long-run potential rate thanks to strong government spending and foreign direct investment, which have offset weakness in exports," she added.
Government is set to release third quarter GDP data on Wednesday.
Ell pointed out that the services sector, which account for more than half of the country's GDP, continue to provide a boost the economy as it has been expanding at an average annual rate of 6% in the past 10 years.
"Business process outsourcing has been a recent driver, boosted by the government's active encouragement of foreign investment," Ell said.
Moreover, remittances, which support consumer spending in the country, remained strong in the third quarter despite global headwinds.
"Remittances were up 5.9% year to date in September over the same period in 2011. This was better than expectations, as remittances barely rose during the global downturn," Ell said.
Third quarter GDP, however, may have been slightly pulled down by the agriculture sector as output contracted because of bad weather, Ell noted.
The Philippine economy expanded by 6.1% in the first half, exceeding government and market expectations.
The government hopes to grow the economy by 5% to 6% this year, from the dismal 3.9% expansion in 2011.