Philippines Q2 GDP growth seen faster —economic managers

Philippine economic growth likely accelerated in the second quarter due to higher household spending as inflation fell within the government’s target range, economic managers said Tuesday.

Economic managers expect the second-quarter economic growth to hit 6.0%, faster than the 5.7% in the three months prior and the 4.3% in the second quarter of 2023.

“It's probably close to at least the lower end of the target,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan told reporters on the sidelines of the Post-SONA Discussions in Pasay City.

The government has set a gross domestic product (GDP) growth target of 6% to 7% for 2024.

Finance Secretary Ralph Recto said the biggest growth driver would still be consumption.

"Still, number one will be consumption because that’s the biggest part. I mean, household consumption is number one, and that’s supported by what we see on bank lending and credit cards, in spite of high interest rates,” Recto said.

The latest data available from the Bangko Sentral ng Pilipinas (BSP) showed that bank lending hit a 14-month high of P12 trillion in May, reflecting 10.1% year-on-year growth, the fastest since March 2023.

Meanwhile, the Monetary Board of the central bank in its latest policy meeting kept policy rates at 17-year highs, even as it revised its risk-adjusted inflation outlook for 2024 downward to 3.8% from 4.0% previously.

Balisacan said the latest indicators point to better GDP growth figures in the second quarter.

“The employment numbers are okay. Exports for the first half are turning out well,” the NEDA chief said.

Data from the latest Labor Force Survey as of May showed that the employment rate stood at 95.9%, equivalent to 48.87 million individuals with jobs or livelihoods during the period.

Moreover, exports from January to May amounted to $30.84 billion, up 7.8% from $28.61 billion in the same period last year, according to the Philippine Statistics Authority.

“These are pretty good indicators,” Balisacan said. “I'll wait for a few more numbers, especially the official data.” —VBL, GMA Integrated News