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The Philippine economy expanded by 6.4 percent in the first quarter of the year, settling within the government's 6 to 7 percent target, according to a report by Phillippine News Agency.
In a briefing on Thursday, Philippine Statistics Authority Undersecretary and National Statistician Dennis Mapa said the growth during the quarter, however, eased from the 8 percent gross domestic product (GDP) growth recorded in the same quarter last year.
National Economic and Development Authority Secretary Arsenio Balisacan said that while the growth figure during the quarter was lower year-on-year, "we need to exercise caution in interpreting this as a slowdown since the previous year’s growth came from a low base."
"Rather, the economy is normalizing its previous trend. The better-than-expected first-quarter performance this year implies that we are returning to our high-growth trajectory despite the various challenges and headwinds we have faced," he said.
Among major economic sectors, agriculture, forestry, and fishing grew by 2.2 percent.
Balisacan said the growth of the agriculture sector "is a promising beginning to 2023, especially given the expected challenge of El Niño later in the year."
"We have experienced El Niño before and are confident that with adequate planning and preparation, we can successfully navigate it again this year," he said.
Industry and services also went up by 3.9 percent and 8.4 percent, respectively.
On the demand side, investment expanded by 12.2 percent while government final consumption expenditure grew by 6.2 percent, which Balisacan attributed to the road infrastructure and railway projects of the government.
Growth of household consumption, however, grew at a softer pace of 6.3 percent from 10 percent in the first quarter of 2022.
Balisacan said the slower growth in consumer spending could be an effect of the tightening of monetary policy.
"The high prices resulted in the tightening of monetary policy and the effects of those could be felt in latter months so perhaps, we are starting to feel that," he said.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) earlier hiked policy rates by another 50 basis points, bringing to 6 percent the overnight reverse repurchase (RRP) rate.
For this year, inflation reached as high as 8.7 percent in January.
In April, inflation already decelerated to 6.6 percent and Balisacan expects the downtrend to continue and ease to the government's target range by the end of the year.
6 to 7% growth target attainable
Despite the headwinds this year, economic managers are optimistic the 6 to 7 percent economic growth target this year will be hit.
"Despite various risks and challenges, the economic outlook for the Philippines in the near and medium term remains solid. We are confident that we will reach our target for this year of 6 to 7 percent growth rate and 6.5 to 8 percent for 2024 to 2028," Balisacan said.
He cited the need to fully implement the strategies in the Philippine Development Plan 2023-2028 to ensure that the country will go back to its high-growth path.
"The strategies call for developing and protecting the capabilities of Filipinos and transforming our production sectors to generate more quality jobs and competitive products while ensuring a conducive overall investment environment in terms of governance and government policies," Balisacan said.
In a separate statement, Department of Finance Secretary Benjamin Diokno also expressed optimism that the country is on track to achieve a 6 to 7 percent growth this year.
"As we continue to rely on domestic demand to propel the economy towards the growth target, the government remains unwavering in protecting the purchasing power of Filipino consumers by acting swiftly to implement direct measures against inflation," Diokno said.
He assured that the government will continue to implement infrastructure development program, which is set at 5 to 6 percent of GDP annually as indicated in the Medium-Term Fiscal Framework (MTFF).
"The MTFF is our blueprint to reduce fiscal deficit, promote fiscal sustainability and enable robust economic growth," Diokno added.
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