Philippine Economy Grows At Slowest Pace Since 2021

(RTTNews) - The Philippine economy grew at the weakest pace since early 2021 as the war in the Middle-east and corruption scandals weighed on investment and spending, official data showed Friday.

Gross domestic product expanded 2.3 percent year-on-year in the second quarter, marking the slowest rate since the first quarter of 2021, the Philippine Statistics Authority said.

This followed first quarter's 2.8 percent expansion. Economists had forecast the growth rate to improve to 3.0 percent.

In the first half of the year, the economy expanded only 2.6 percent, well short of government's full-year growth forecast of 3.5 percent to 4.5 percent.

The expenditure-side of GDP showed that growth in household spending eased to 2.8 percent in the second quarter from 3.0 percent in the preceding period. Meanwhile, government spending growth accelerated to 8.3 percent from 4.8 percent.

On the other hand, gross capital formation declined deeply by 9.2 percent mainly due to the contraction of the construction sector.

Exports of goods and services registered a robust growth of 12.2 percent, following a 7.8 percent rise. At the same time, imports growth eased to 5.5 percent from 6.8 percent.

The Bangko Sentral ng Pilipinas had raised its interest rate by a quarter-point each in April and June to control inflation expectations and mitigate the risk of second-round effects. The bank expects headline inflation to breach the 4.0-percent tolerance ceiling in both this year and next.