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Philippine GDP growth moderated to 4.3% in the second quarter of 2023 as higher inflation and contraction in government spending slowed economic activity
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The latest GDP growth figure lagged the 6.4% expansion in Q1 2023 and 7.4% surge in Q2 2022
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The slower growth brings real GDP growth to 5.3% in the first semester of 2023
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To achieve the 6-7% government growth rate for the year, the H2 2023 GDP must grow at least 6.6%
The Philippine economy expanded at a moderate pace of 4.3% in the second quarter of 2023 amid higher inflation and contraction in government spending.
The latest gross domestic product expansion was lower than the 6.4% growth in the first quarter of this year and 7.5% advance in the second quarter of 2022.
RELATED READ: PH economy grew 6.4% in Q1
The second-quarter growth brings real GDP growth to 5.3% in the first semester of 2023. This means GDP must expand at least 6.6% in the second half of the year to achieve the government’s growth target rate of 6-7% for the year.
Economic managers said in a joint statement the moderate economic expansion in the second quarter was driven by increases in tourism-related spending and commercial investments, but was tempered by high commodity prices, the lagged effects of interest rate hikes, contraction in government spending, and slower global economic growth.
Government expenditure contracted by 7.1% in the absence of election-related spending in the first half of the year.
Still, the economic managers believe the 6-7% full year growth target is “still attainable” notwithstanding the challenges.
According to the Philippine Statistics Authority, the main contributors to the growth in the second quarter were wholesale and retail trade; repair of motor vehicles and motorcycles, 5.3%; financial and insurance activities, 5%; and transportation and storage, 17.3%.
Major economic sectors, namely agriculture, forestry, and fishing; industry, and services all posted positive growths in the second quarter of 2023 with 0.2%, 2.1%, and 6%, respectively.
On the demand side, household final consumption expenditure grew 5.5%. Exports of goods and services also increased 4.1% and imports of goods and services gained 0.4%. Meanwhile, government final consumption expenditure and gross capital formation contracted 7.1% and 0.04%, respectively.
Gross national income grew 8.6% in the second quarter of 2023 while net primary income from the rest of the world grew 90.6% during the period.
