- Growth driven by surge in public spending, household consumption
- Inflation eases, boosting expectations for policy rate cut
- Economy shows resilience amid global uncertainties, says official
MANILA — The Philippine economy expanded slightly faster in the first quarter even as growth lagged expectations, with household consumption and public spending underpinning momentum as the country faces rising external headwinds from U.S. tariffs.
Gross domestic product rose by an annual 5.4% in the January–March quarter, official data showed on Thursday, slightly ahead of the 5.3% pace in the fourth quarter of 2024. However, the figure fell short of the 5.7% growth projected in a Reuters poll.
“This performance underscores the relative resilience of our economy in the face of global volatility,” Economic Development Undersecretary Rosemarie Edillon said at a press briefing.
On a seasonally adjusted basis, the economy expanded 1.2% quarter-on-quarter, missing economists’ median forecast of 1.6%, according to the Reuters poll.
Growth in the first quarter was largely driven by a surge in public spending, which jumped 18.7%, the fastest pace since the second quarter 2020, as the government front-loaded infrastructure spending before a 45-day ban imposed ahead of the May 12 midterm election takes effect.
Household consumption also picked up, growing 5.3% from 4.7% in the previous quarter, buoyed by easing inflation, which Edillon said may give the Bangko Sentral ng Pilipinas more leeway to loosen monetary policy.
“There’s really room for more easing,” she said.
Annual inflation in April slowed to its lowest level in over five years to 1.4%, boosting expectations of a policy rate cut at the central bank’s next meeting on June 19.
—Reporting by Mikhail Flores and Karen Lema; Editing by John Mair and Shri Navaratnam
