Finance Secretary Carlos Dominguez III sees an even better growth narrative for the Philippines in the succeeding quarters as the Duterte administration further ramps up spending on infrastructure and human capital development to supercharge the economy and move closer to financial inclusion.

“Notwithstanding the continued political noise and the terrorist activity in Marawi, which President Duterte had decisively addressed, the economy managed to perform well in the third quarter as the government posted a double-digit increase in public investments and pursued initiatives to further improve fiscal health and boost investor sentiment,” Dominguez said on Thursday in response to the 6.9 percent economic expansion over the July-September 2017 period, as announced by the Philippine Statistics Authority (PSA).

“Expect a more riveting growth narrative in the fourth quarter and onwards as the Duterte administration shifts to higher gear its unparalleled investment and stimulus program on the strength of the government’s greater absorptive capacity and its resolve to advance its ‘Build, Build, Build’ infra program as the main driver of the economy,” he said.

Dominguez expressed confidence that the domestic economy is on track to meet the official full-year expansion target of 6.5-7.5 percent as the government accelerates spending on infrastructure, which has the highest multiplier effect on growth, and on human capital formation, which is essential to achieving economic inclusion for all Filipinos.

He assured the public that “Malacañang would be able to maintain fiscal discipline despite the escalated public spending on the Duterte watch owing to its commitment to provide a steady revenue stream for its P8.4-trillion ‘Build, Build, Build’ program through Official Development Assistance (ODA) packages and the Tax Reform for Acceleration and Inclusion Act (TRAIN) bill, which the Congress is expected to pass this fourth quarter.”

Also, he said, “there are such positive benchmarks as the record Gross International Reserve (GIR) level, manageable debt service and formidable earnings from the OFW (overseas Filipino workers) and BPO (business process outsourcing) sectors that would likewise help the government sustain its economic stimulus plan into the medium term.”

According to Secretary Ernesto Pernia of the National Economic and Development Authority (NEDA), the Philippines’ third quarter gross domestic product (GDP) performance was higher than the forecasts by economists of 6.5 to 6.7 percent. Compared to other Asian countries, the Philippines remains one of the region’s best performing economies, second to Vietnam which reported a 7.5 percent growth in the third quarter, and higher than China’s 6.8 percent and Indonesia’s 5.1 percent for the same period.

Dominguez said the country is well on its way to attaining an investment-led economy in the face of the dramatic rise in foreign direct investment (FDI) inflows to $1.203 billion as of August, or 70 percent higher than the $708 million in the same month last year.

He said the positive investor sentiment is illustrated by two major investments in recent months, namely, the $1 billion investment by Japan Tobacco International (JTI) in acquiring the assets of cigarette manufacturer Mighty Corp., and the $1.3-billion deal between the Philippines’ Energy Development Corporation (EDC) and a consortium of foreign investors backed by Macquarie Infrastructure and Real Assets (MIRA) and Arran Investment Pte. Ltd., which is an affiliate of Singaporean sovereign wealth fund GIC.

According to the PSA, the economy grew by 6.9 percent in the third quarter, compared to 6.7 percent in the second quarter (revised upward from 6.5 percent) and 7.0 percent in the same period last year.

On the expenditure side, the PSA attributed the 6.9 percent growth during the July-September 2017 period to “household final consumption expenditure, durable equipment, net exports, and government final consumption expenditure.”

The services sector contributed the highest to the third quarter GDP growth with 4.2 percentage points, followed by industry with 2.5 percentage points and agriculture with 0.2 percentage points.

Department of Budget and Management (DBM) data showed that national government disbursements went up 13.9 percent year-on-year last August to P201.6 billion, with Infrastructure and Other Capital expenditures surging 18.1 percent to P40.1 billion during that month.

Meanwhile, Bangko Sentral ng Pilipinas (BSP) data showed that the GIR hit $80.62 billion as of end-October, OFW remittances coursed through banks totaled $18.6 billion over the January-August period, and BPO revenues are projected to reach $24.5 billion this year.

As for debt payments, the Bureau of the Treasury said the debt service bill was P582.2 billion in the nine months to September, or 16.27 percent lower than the P696.19 billion over the same nine-month period last year.