The Philippine economy witnessed a moderated growth rate of 4.3 percent in the second quarter of the year, a step down from the robust 6.4 percent expansion recorded in the first quarter, as reported by the Philippine News Agency referencing the Philippine Statistics Authority (PSA). During a briefing, National Statistician Dennis Mapa disclosed that the GDP growth in this quarter also fell short of the 7.5 percent increase observed in the same period in 2022.
The year-to-date economic growth for the country stands at 5.3 percent.
In a joint statement read by National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan during the briefing, the economic team attributed the deceleration to several factors including the impact of interest rate hikes, inflation, and a minor contraction in government spending.
The economic team, comprised of NEDA Secretary Balisacan, Department of Budget and Management (DBM) Secretary Amenah Pangandaman, and Finance Secretary Benjamin Diokno, stated, "For the second quarter, the moderate economic expansion was driven by increases in tourism-related spending and commercial investments, but was tempered by high commodity prices, the lagged effects of interest rate hikes, the contraction in government spending, and slower global economic growth."
In terms of economic sectors, including agriculture, forestry, fishing, industry, and services, all posted positive growths in the second quarter of 2023 at 0.2 percent, 2.1 percent, and 6 percent, respectively.
On the demand side, the household final consumption expenditure growth reached 5.5 percent. Exports of goods and services registered a growth of 4.1 percent, while imports of goods and services witnessed a slight 0.4 percent increase.
However, the government's final consumption expenditure (GFCE) and gross capital formation faced contractions of 7.1 percent and 0.04 percent, respectively. The economic team reassured that government spending would regain momentum in upcoming quarters.
Despite the Q2 slowdown, the economic team remains optimistic about achieving the year's growth target. "To achieve the target growth rate of 6 to 7 percent for the year, the country’s GDP needs to grow by at least 6.6 percent in the second half of 2023. Notwithstanding the challenges, we believe this is still attainable," the team affirmed.
To attain this goal, the government plans to expedite programs and projects under the 2023 national budget, enhance supply-side interventions, and intensify fiscal stimulus activities to bolster productive capacities. Moreover, the government will closely monitor the impact of global economic fluctuations and maintain dialogue with affected sectors.
Amid the ongoing economic challenges, the economic team stands committed to adopting necessary policy adjustments to ensure the realization of growth targets. "We firmly believe that the prospects of the Philippine economy remain strong and positive. Our economy has weathered the worst and most challenging times during the pandemic. Now, we are better equipped and more resilient to withstand the various risks and challenges on both the external and domestic fronts," the team concluded.
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