The Philippine economy expanded less than expected in the beginning of the year, data revealed on Thursday, due to ongoing high prices and a widespread lack of rain.
Dennis Mapa, the national statistician, informed AFP that the 5.7 per cent growth in January-March was lower than the 6.4 per cent recorded in the same period last year.
The figure was also under the median analysts’ prediction of 5.9 per cent, a result that Ser Percival Reyes of the Ateneo Center for Economic Research and Development called “quite disappointing”.
“The government actually expected this, considering inflation and the intense heat, but the economic impact turned out to be significant,” Reyes mentioned.
Significant parts of the country experienced a drought caused by El Nino during that time, causing extensive damage to farms, before being hit by intense heat in the past two months.
The agriculture sector only grew by 0.4 per cent, a sharp decrease from the 2.2 per cent growth seen in the first quarter of 2023, leading to higher food prices.
Despite falling short of the government’s 6-7 per cent target, Economic Planning Secretary Arsenio Balisacan praised the data as evidence of the country’s economic “resilience”.
He also stated that the target was still within reach.
Balisacan mentioned, “Construction slowed down, undoubtedly affected by prolonged periods of intense heat”.
“Household spending also decreased due to high prices of major food items and the heatwave.”
The 4.6 per cent rise in household consumption was the slowest since the third quarter of 2010, excluding the pandemic years.
Mapa stated that financial activities, wholesale and retail trade, and manufacturing drove the growth.
