NEDA sees growth bouncing back in Q3  

MANILA, Philippines — The National Economic and Development Authority (NEDA) expects a resurgence in economic growth in the third quarter after a slowdown in the second quarter.

NEDA Secretary Arsenio Balisacan told reporters the government expects the country’s economic performance to bounce back in the third quarter.

The economy posted a 4.3 percent growth in the second quarter, slower than the 6.4 percent in the first quarter and 7.5 percent in the second quarter last year, due to elevated inflation and high interest rates that resulted in weaker consumption.

The slower growth in the second quarter was also attributed to a contraction in government spending.

With growth in the first semester at 5.3 percent, Balisacan said the economy would have to grow by at least 6.6 percent in the second half to meet the government’s growth target of six to seven percent for this year.

When asked if it is time to revisit or adjust the government’s growth target for the year, Balisacan said the government would have to wait for the third quarter gross domestic product performance.

The Philippine Statistics Authority will release data on the country’s third quarter economic performance on Nov. 9.

Institutions like the Asian Development Bank (ADB) and Association of Southeast Asian Nations Plus 3 Macroeconomic Research Office (AMRO) recently trimmed their growth forecasts for the Philippines for this year, citing inflationary pressures and global headwinds.

In particular, the ADB has lowered its growth forecast for the Philippines for this year to 5.7 percent from six percent previously.

Meanwhile, AMRO has revised its 2023 growth forecast for the Philippines to 5.9 percent from its previous projection of 6.2 percent.

“The reduction in growth forecast by ADB and other institutions is true for every country because of what they are seeing in the global market… There are still quite upside risks there,” Balisacan said.

He said meetings are being held with underspending agencies, and the Department of Budget and Management has also asked these agencies to submit their catch-up spending plans.

“We have been reporting to the President the state of these catch-up plans. Hopefully, we can recover,” he said.

With inflation posing a challenge to the country’s growth, he said the economic team also remains focused on addressing this issue.

Inflation rose to 5.3 percent in August and ended a six-month downtrend amid faster upticks in food prices.

Average inflation in the January to August period was at 6.6 percent, still higher than the Bangko Sentral ng Pilipinas’ two to four percent target range.

“High inflation, as we all know, reduces domestic demand. So we are incessantly monitoring the situation and giving advice to the President accordingly,” Balisacan said.