Philippine economy grows less expected than on weaker consumer spending

By Thomson Reuters May 8, 2024 | 10:32 PM

By Neil Jerome Morales and Mikhail Flores

MANILA (Reuters) – The Philippine economy accelerated less than expected in the first quarter, government data showed on Thursday, as weaker consumer spending offset a rebound in export growth.

Gross domestic product grew 5.7% in the first three months from the same period last year, the statistics agency said, up from the previous quarter’s 5.5% but below the 5.9% forecast in a Reuters poll.

The Southeast Asian nation’s government remains optimistic about growth, Economic Planning Secretary Arsenio Balisacan said, including the strong rebound in exports fuelled by a recovery in shipments of electronic products.

“Despite our challenges on both domestic and international fronts, our economy continues to demonstrate remarkable resilience and growth,” Balisacan told a press conference. “We are in good shape.”

He expressed confidence the economy can hit the government’s 6.0%-7.0% full-year growth target. The government cut the target range last month from December’s 6.5%-7.5% projection due to high inflation and an anticipated global slowdown.

Inflation continues to dampen domestic demand, which grew 4.6% in the first quarter, the weakest since a 4.8% contraction in the first quarter of 2021.

On a seasonally adjusted basis, economic growth slowed to 1.3% from 2.1% in the previous three months, although this was above the 1.0% growth forecast in the Reuters poll.

Exports rose 9.5% from a year earlier, the fastest since the fourth quarter of 2022.

(Reporting by Neil Jerome Morales and Mikhail Flores in Manila; Writing by Karen Lema; Editing by John Mair and William Mallard)