Economists said the 2017 gross domestic product growth likely settled within the 6.5 percent to 7 percent target range of the government on the back of higher infrastructure spending.

Economists of First Metro Investment Corp. and University of Asia & the Pacific said in a joint report the growth momentum returned in the third quarter when the economy expanded 6.9 percent, better than what most economists expected for the period.

“With the growth momentum back in the third quarter and a strong start in the fourth quarter, we think our early forecast of 6.5 percent to 7 percent GDP growth for 2017 will easily play out,” the economists said in their latest monthly Market Call report.

“Off to a fast start in the fourth quarter, national government spending will likely keep the quick pace and expand by double digits in the last two months of the year, as infrastructure spending rises further,” they said.

The economists said that exports were expected to rebound in the fourth quarter as the positive effect of the peso depreciation spread at a wider scale.

Data showed that government disbursements in October soared 28 percent year-on-year to P226.9 billion, the highest growth recorded this year. A 17.8-percent jump on infrastructure and capital outlays provided a big impetus.

The remarkable performance in other months especially in the latter part of the second quarter and early third quarter resulted in a year-to-date spending of P2.2 trillion, up 10 percent from the same period in 2016.

The economy grew 6.9 percent in the third quarter, driven by higher fiscal spending, robust domestic demand and investments. This brought GDP growth in the first three quarters to 6.7 percent, within the government’s official target range of 6.5 percent to 7.5 percent this year.

British banking giant Hongkong and Shanghai Banking Corp. raised its 2017 and 2018 growth forecast for the Philippines to 6.7 percent from 6.5 percent.

HSBC cited the significant contribution from consumption and investments in the third-quarter economic growth of 6.9 percent.

HSBC expects public construction to expand further in 2018 as the government embarks on a more aggressive infrastructure program and boosts infrastructure spending to 7.2 percent of GDP by 2022.

The International Monetary Fund also maintained its bright growth prospects for the Philippines this year and 2018 but warned that a combination of high credit expansion, buoyant private investment and fiscal expansion without tax reform could lead to overheating of the economy.

“The outlook for the Philippine economy is favorable despite external headwinds. Real GDP growth is projected at 6.6 percent in 2017 and 6.7 percent in 2018, owing to continued robust domestic demand,” it said.

The economy grew 6.9 percent in 2016.

By Julito G. Rada