© Reuters. FILE PHOTO-Workers remove roots from onions before they are sold at a public market in Quezon City, Metro Manila, Philippines, February 9, 2023. REUTERS/Eloisa Lopez/File Photo
MANILA (Reuters) – The Philippine economy slowed for a third straight quarter in April-June from last year, the statistics agency said on Thursday, dragged down by higher commodity prices and slower government and consumer spending.
Gross domestic product (GDP) in the June quarter rose 4.3%, losing further momentum after the previous quarter’s 6.4%, which was slower than the December quarter’s 7.1%.
On a quarter-on-quarter basis, the economy contracted 0.9% in the second quarter, weaker than the 1.1% expansion in the March quarter and missing a 0.5% growth forecast of economists.
The country’s economic ministers said the weaker performance was due to higher prices of farm goods deterring consumer spending, plus a contraction in government spending compared to the same period a year earlier, when an election was held.
“For the second quarter, the moderate economic expansion was driven by increases in tourism-related spending and commercial investments, but was tempered by high commodity prices, the lagged effects of interest rate hikes, the contraction in government spending, and slower global economic growth,” they said in a statement.
The slower than expected growth in the second quarter will weigh on the policy review of the central bank, which will meet on Aug. 17 to decide whether to resume raising rates or extend its rate hike pause.
The ministers said an improving inflation outlook boded well for an easing of interest rates, and government spending would accelerate in the coming quarters and they aimed to ensure overall price stability amid upside risks.