THE Philippine economy likely grew at a faster pace in the second quarter of the year, driven by election-related spending and easing inflation.
In a commentary on August 1, Bank of the Philippine Islands (BPI) lead economist Jun Neri said Philippine economic growth likely accelerated to 5.8 percent in the second quarter of the year, faster than the 5.4 percent gross domestic product (GDP) growth.
“On the demand side, household consumption likely remained the main growth driver, supported by election-related spending, easing inflation, particularly the sustained decline in rice prices, and continued strength in consumer lending,” Neri said.
“Stronger food exports may have been bolstered by improved weather just as foreign sales of electronics were booked ahead of the implementation of higher US tariffs,” he added.
Neri however, said these could be partially offset by slower government spending and infrastructure expenditures due to the election spending ban.
On the production side, Neri said softer electricity sales likely led to a more subdued pace of industrial and commercial activity, posing a mild drag on overall growth momentum.
“While risks remain, achieving the government’s revised growth target of 5.5 percent to 6.5 percent remains feasible, especially if the 2Q (second quarter) print surprises on the upside,” he said.
BPI expects the country’s economic growth to hit 5.8 percent this year.
Neri, however, noted that a downward revision is possible if delays and damage to production and infrastructure from recent typhoons drag overall performance.
“Downside risks from higher US tariffs may also need to be factored in if more changes are announced later this year,” he said. (PNA)
