The Philippine economy grew at a slower pace in the first quarter of 2024 on the back of accelerating inflation and higher interest rates, the Philippine Statistics Authority said on Thursday.
Based on the state-run statistics bureau, the country’s gross domestic product in the three months through March grew slower by 5.7 percent from last year’s 6.4 percent expansion.
On a quarterly basis, the latest GDP print is higher than the revised 5.5 percent figure reported for the fourth quarter of 2023.
After seasonal adjustments, the latest GDP economy expanded by 1.3 percent compared to the previous quarter but was slower than the 2.1 percent rate seen in the fourth quarter.
In the briefing, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the country’s GDP growth rate in the first quarter was about the same as Vietnam’s at 5.66 percent during the first three months of the year.
He said the Philippines’ economic growth was also higher than that of other big economies, such as China’s at 5.3 percent, Indonesia’s at 5.1 percent, and Malaysia’s at 3.9 percent.
PSA chief statistician Claire Dennis Mapa, who was also in the briefing attributed the quarter-on-quarter economic growth to various sectors.
Data from PSA showed that financial and insurance activities saw a 10.0 percent increase; wholesale and retail trade including motor vehicle and motorcycle repairs by 6.4 percent; and manufacturing by 4.5 percent.
Agriculture, forestry, and fishing; industry; and services also showed year-on-year growth in the first quarter at 0.4 percent, 5.1 percent, and 6.9 percent respectively.
Household expenditure down
However, household spending slowed from the 5.3 percent expansion in the fourth quarter of 2023 to 4.6 percent in the first quarter.
Balisacan said the slowdown in household spending was due to the elevated prices of major food items and the heat wave.
“Construction slowed down, no doubt affected by prolonged periods of extreme heat. Household spending also slowed due to elevated prices of major food items and the heat wave,” Balisacan said.
“People don’t want to go out. It’s so hot, I think that also affected the construction (sector),” he added.
In the first quarter, government spending rose by a meager 1.7 percent while investment increased by 1.3 percent as opposed to 11.6% percent in the fourth quarter.
Nonetheless, Balisacan expressed optimism about the country’s growth prospects, predicting a quicker expansion in the current quarter that, barring a reversal of the government’s victories in the fight against inflation, will allow the Philippines to reach its growth target in 2024. (TCSP)
