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Consumers eager to normalize seen boosting economy towards yearend

PHILIPPINE STAR/ MICHAEL VARCAS

THE boost to the economy typically provided by the year-end holidays will be given added impetus by consumers seeking to return to normal after the pandemic, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in a report.

“With consumers and firms eager to normalize, the coming Christmas season should further boost employment for more jobs especially in the trade, transport, and storage sub-sectors,” according to the two institutions’ market call report on Tuesday.

“Hiring, especially in services which were particularly hit by the pandemic, should remain positive as businesses prepare for the Christmas season, given the itch of people, both young and old, to get out of their two-year incarceration,” they added.

In August, unemployment was 5.3%, slightly higher than the 5.2% jobless rate posted in July but lower than the year-earlier level of 8.1%.

FMIC and UA&P economists said gross domestic product growth for 2022 will come in at 6.5%, in line with the government’s target range of 6.5-7.5%.

Robust tax collections by the Bureau of Internal Revenue (BIR) also suggest lively economic activity in the second half despite the absence of election-related spending, the report added.

The BIR was able to collect P426.327 billion in July and August, surpassing the bureau’s collection goal of P421.069 billion for the period by 1.25%.

However, the report noted that elevated inflation will persist.

“Its negative effect on consumer spending should be muted by higher peso incomes of overseas Filipino workers, call center workers and exporters. We may expect an inflation rate of 6.9% in October,” it added.

Headline inflation hit 6.9% in September amid higher food, fuel, and transport costs.

National Government spending, especially on infrastructure and agriculture and key projects is also expected to accelerate in the coming months.

“We expect manufacturing output to rise further in the fourth quarter even as the National Government ratchets up spending on infrastructure and agriculture,” it added. — Luisa Maria Jacinta C. Jocson

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