MANILA, Philippines — The Philippines is unlikely to meet its 2014 growth target after the economy's expansion slowed to 5.3 percent in the third quarter.
Growth was dragged down by reduced government spending, a decline in agriculture and slower expansion in services and industry. The economy grew 6.4 percent in the previous quarter.
Economic Planning Secretary Arsenio Balisacan said Thursday that growth for the first nine months was 5.8 percent.
He said hitting even the low end of the government's 6.5-7.5 percent full-year target "would pose a big challenge."
The economy would have to expand 8.2 percent in the fourth quarter to meet it, and economic managers "will brainstorm intensively on how we can come as close to this figure as possible," he said.
Agriculture and fisheries declined 2.7 percent due to damage from calamites, including last year's Typhoon Haiyan.
Service industries, which remained the growth driver, decelerated to 5.4 percent growth from 7.7 percent a year earlier. Industrial growth slowed to 7.6 percent from 7.7 percent last year and 7.9 percent the previous quarter.
Government spending and public construction shrank 6.2 percent due to delays in projects that stemmed from new documentary requirements.
The Philippine economy grew 7 percent in the third quarter of last year
"Do we see a brighter prospect? The short answer is yes," Balisacan said.
It is expected that private business will remain robust, government will have adjusted to new budget protocols, and the reconstruction assistance for typhoon affected areas will gain further traction, he said.
Finance Secretary Cesar Purisima said the 5.3 percent growth in the third quarter highlights problems the Philippines needs to address, but also puts it on a record of 11 straight quarters of above 5 percent growth and among the fastest growing economies in Asia.
"Government spending can improve, and we have ample fiscal space to increase investments in our infrastructure and our people, through education, health, and social services," he said.