FX.co ★ Philippine Economic Growth Fastest In More Than A Year

The Philippine economy experienced its most rapid growth in over a year during the second quarter, driven by increased government spending and investment. According to the Philippine Statistics Authority, the nation's Gross Domestic Product (GDP) rose by 6.3 percent year-on-year, following a revised 5.8 percent expansion in the first quarter. This rate of growth is the highest since the first quarter of 2023 and surpasses economists' forecast of 6.2 percent.

On a quarterly basis, however, growth decelerated to 0.5 percent in the second quarter, falling short of the anticipated 0.9 percent.

From a demand perspective, household consumption maintained a consistent growth rate of 4.6 percent, while government spending surged by 10.7 percent. Investment also showed substantial growth, expanding by 11.5 percent compared to a previous gain of 0.5 percent. Additionally, total exports and imports rose by 4.2 percent and 5.2 percent respectively.

This significant second-quarter growth elevates real growth for the year's first half to 6.0 percent, aligning the economy with its annual growth target of 6-7 percent, as stated by National Economic and Development Authority Secretary Arsenio Balisacan.

Despite evolving risks and challenges, Balisacan remains optimistic about the Philippines' economic prospects in the near and medium term. Conversely, Shivaan Tandon, an economist at Capital Economics, cautioned that the sharp quarterly slowdown suggests below-trend growth may continue for the remainder of the year, influenced by tight monetary policy, slower remittance growth, and subdued export demand.