NextGen Day

In line with the government’s aim of 6 to 7 percent, the Philippine economy grew by 6.4 percent in the first quarter of this year.

Dennis Mapa, the undersecretary of the Philippine Statistics Authority and national statistician, stated in a briefing on Thursday that the increase during the quarter was lower than the 8% GDP growth reported in the same quarter last year.

Arsenio Balisacan, secretary of the National Economic and Development Authority, stated that although the quarterly growth rate was lower year over year, “we need to exercise caution in interpreting this as a slowdown since the previous year’s growth came from a low base.”

“Instead, the economy is returning to its prior path. Despite the multiple obstacles and hurdles we have encountered, our better-than-expected first-quarter performance this year suggests that we are resuming our high-growth trajectory, he added.

The three main economic sectors of agriculture, forestry, and fishing all saw growth of 2.2%.

Given the anticipated difficulty of El Nino later in the year, Balisacan stated the expansion of the agricultural sector “is a promising beginning to 2023.”

We have dealt with El Nino before, so we are optimistic that we can do so again this year with careful planning and preparation.

Services and industry both increased by 8.4 percent and 3.9 percent, respectively.

On the demand side, investment increased by 12.2% while government final consumption expenditure increased by 6.2%, according to Balisacan, who credited government road and railroad projects.

However, the rate of growth of household spending slowed down to 6.3 percent from 10 percent in the first quarter of 2022.

According to Balisacan, the tightening of monetary policy may be the cause of the slower growth in consumer expenditure.

The effects of tightening monetary policy as a result of elevated prices “could be felt in later months, so perhaps we are starting to feel that,” he said.

The overnight reverse repurchase (RRP) rate was raised by the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) by another 50 basis points, bringing it to 6 percent.

Inflation for this year peaked in January at 8.7 percent.

Inflation already started to slow down in April, falling to 6.6 percent, and by the end of the year, according to Balisacan, the trend will continue down and relax to the government’s goal range.

Reachable growth goal of 6 to 7 percent

Economic managers are certain that the aim of 6 to 7 percent economic growth this year would be met despite the current challenges.

The economic outlook for the Philippines in the short and medium term is still positive despite a number of risks and difficulties. According to Balisacan, “We are sure that we will meet our target growth rate goals of 6 to 7 percent for this year and 6.5 to 8 percent for 2024 to 2028.

He underlined the necessity for the Philippine Development Plan 2023–2028 to be completely implemented in order to guarantee that the nation will return to its high-growth path.

In order to create more high-quality jobs and competitive goods, our manufacturing sectors must be transformed, according to Balisacan. At the same time, a friendly overall investment climate in terms of governance and government policies must be maintained.

Department of Finance Secretary Benjamin Diokno expressed confidence that the nation is on track to post a 6 to 7 percent growth this year in a separate statement.

The government is steadfast in protecting the purchasing power of Filipino consumers by moving quickly to implement direct measures against inflation, according to Diokno. “As we continue to rely on domestic demand to propel the economy towards the growth target,” he said.

He pledged that the government will continue to carry out the program for developing infrastructure, which is estimated to cost between 5 and 6 percent of GDP annually in the Medium-Term Fiscal Framework (MTFF).

“The MTFF is our blueprint to reduce the fiscal deficit, promote fiscal sustainability, and enable robust economic growth,” Diokno continued.

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