PHL economy likely grew more than 6% in Q2 — Finance chief

The Philippine economy likely grew faster in the second quarter amid better state spending and increased household consumption, the Department of Finance (DoF) said.

“If you’re talking about growth rate for the second quarter, I think we’re pretty optimistic. It will be higher than the first (quarter),” Finance Secretary Ralph G. Recto told reporters on the sidelines of an event late Tuesday.

In the first quarter, gross domestic product (GDP) expanded at a weaker-than-expected 5.7% due to slower consumption and state spending.

Mr. Recto said he is “crossing his fingers” that GDP growth would be above 6%, driven by consumption, government spending and lower inflation.

The government is targeting 6-7% GDP growth this year.

Headline inflation eased to 3.7% in June due to a slower rise in power and transport costs, ending four straight months of acceleration.

Last week, National Economic and Development Authority Secretary Arsenio M. Balisacan said GDP growth in the April-to-June period would likely be near the lower end of the government’s 6-7% target.

The Philippine Statistics Authority is scheduled to release second-quarter GDP growth data on Aug. 8.

Jonathan L. Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., forecasts GDP growth at 6.1% in the second quarter, driven by infrastructure spending and a recovery in private spending.

However, he expects full-year growth to average at 5.8% this year, and 6.3% for 2025.

IBON Foundation Executive Director Jose Enrique A. Africa said state spending growth in the second quarter might be subdued due to debt service.

“The stimulus effect of higher government spending is also diminished to the extent that these are spent on debt service or on imported materials, equipment or contractors for infrastructure projects,” he said in a Viber message.

The National Government’s debt service bill, which refers to state payments on its domestic and foreign debt, rose by 48% to PHP 1.22 trillion in the January-to-May period from PHP 819.53 billion a year ago. — Beatriz Marie D. Cruz