The economy disappointingly registered a slower growth in the second quarter of 2023.
Reduced government expenditures, including those for infrastructure projects, partly led to a sluggish expansion.
The Philippine economy expanded just 4.3 percent in the second quarter, slower than 6.4 percent in the first quarter and 7.5 percent a year ago, to bring the first-half growth to 5.3 percent.
The economy struggled amid an uncertain global environment that led to higher inflation and increased interest rates.
Some sectors of the economy are expanding at a faster clip, led by tourism, commerce and the services industry. But their contribution is not enough pull up the rest of the economy.
The higher costs of goods and services and prohibitive bank lending rates are a dampener for business operations and personal consumption.
The inflation rate in the first six months of the year stood at 6.8 percent, or much above the government’s target range of 2 percent to 4 percent.
The government’s chief economist, National Economic and Development Authority Secretary Arsenio Balisacan. however, remains upbeat despite the unimpressive growth figure. The economy must expand by 6.6 percent in the second semester to keep the government’s 6-percent to 7-percent growth goal on track—and Mr. Balicasan thinks this is attainable.
His statement implies that the government may have to front-load some of the government’s programmed expenditures in the third quarter of the year to play catch-up with the gross domestic product target.
The GDP figures showed that the government final consumption expenditure and gross capital formation in the second quarter contracted 7.1 percent and -0.04 percent, respectively.
In simple terms, the government spent less on public works and on the construction of school buildings and infrastructure projects.
Higher expenditures on civil works, especially in the aftermath of strong typhoons and the heavy monsoon rain that destroyed bridges and flooded roads, will increase economic activities and consumption.
They may offset the slow economic growth in the first six months of the year.
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