Philippines economy grows 6.3% in Q2 despite ‘anaemic’ consumer spending
2024.08.08 00:23
By Mikhail Flores and Neil Jerome Morales
MANILA (Reuters) – The Philippine economy expanded 6.3% in the second quarter, official data released on Thursday showed, with government spending and investments offsetting “anaemic” consumption growth as inflation weighed on households.
The expansion was the fastest since the 6.4% annual growth in the first quarter of 2023, beating the 6.2% estimate in a Reuters poll of economists and outpacing the upwardly revised 5.8% growth in the first three months of the year.
Consumer spending grew 4.6% in the period, accounting for two-thirds of output. Investments increased 11.5% while government spending expanded by 10.5%.
“The household final consumption expenditure continued to be a bit anaemic, the growth is not as strong as one would expect,” Economic Planning Secretary Arsenio Balisacan told reporters.
First-half gross domestic product (GDP) growth averaged 6.0%, putting the economy on track to meet the full-year growth target of 6.0% to 7.0%, Balisacan said.
On a seasonally adjusted basis, the economy grew 0.5% quarter-on-quarter, slower than the previous quarter’s 1.3% growth and below the 0.9% forecast in a Reuters poll.
The GDP data followed an inflation report on Tuesday that showed consumer prices quickened at the fastest pace in nine months in July, prompting the central bank governor to say a rate cut at its next meeting on Aug. 15 would be “a little bit less likely.”
The 4.4% inflation rate, which was above market expectations, was outside the central bank’s 2.0% to 4.0% target range for the year. Annual inflation in June was 3.7%.
The economy also received a boost from a drop in unemployment rate, which stood at 3.1% in June, the lowest since December 2023, according to government data released on Wednesday.
But agriculture, forestry and fishing remained a weak spot in the second quarter, shrinking 2.3% from a year earlier due to a prolonged dry spell caused by the El Nino weather pattern.
