Philippine Economic Growth Moderates In Q1

Philippine Economic Growth Moderates In Q1

May 12, 2023

The Philippine economy expanded at a slower pace in the first quarter but remained strong on investment and household spending.

Gross domestic product registered a slower growth of 6.4 percent after rising 7.1 percent in the fourth quarter of 2022, the Philippine Statistics Authority said Thursday.

The latest rate was the weakest in the current sequence of growth that began in the second quarter of 2021 and also faster than the expected expansion of 6.1 percent.

Quarter-on-quarter, the economy logged a faster than expected growth of 1.1 percent in the first quarter. GDP was forecast to climb 0.9 percent.

On the demand side, household spending increased 6.3 percent annually, but weaker than the 7.0 percent rise a quarter ago. Meanwhile, growth in government consumption accelerated to 6.2 percent from 3.3 percent.

Gross capital formation logged a double-digit increase of 12.2 percent, following a 3.8 percent rise.

Exports of goods and services grew only 0.4 percent after a strong 14.6 percent increase. The growth in imports of goods and services slowed to 4.2 percent from 7.0 percent.

ING economist Nicholas Mapa expects GDP to remain in expansion mode for the rest of the year, although the economy is bracing for a likely slowdown as the triple threat of high inflation, elevated borrowing costs and rising debt levels weigh on momentum.

With inflation on the downtrend and growth showing signs of slowing, this will open the door for the central bank to pause and keep policy rates at 6.25 percent.

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