Last week, our economic managers released a joint statement on the country’s economic performance for Q2 2023. And while they recognize that the economic environment will still be quite challenging for the remaining months of the year up to 2024, they are also optimistic about the Philippines’ overall economic performance. They also mentioned that since we were able to surmount the challenges caused by the pandemic, we are now better equipped to face both external and domestic risks and challenges.
Based on the Philippine Statistics Authority’s (PSA) report, the country’s GDP for Q2 2023 expanded by 4.3 percent, which brought our GDP growth to 5.3 percent for the first half of 2023. Remember that our target growth rate is 6-7 percent, which means that GDP still needs to grow by at least 6.6 percent in the third and fourth quarters of this year.
Our economic growth from January to June 2023 was mainly due to high employment levels, the tourism sector picking up from a long slack, our students’ return to the classrooms, and the increase in new investment registrations.
Government spending decreased by 7.1 percent in the first semester of 2023, but this will accelerate in the coming months, the economic managers said. The implementation of government programs and projects will be expedited from hereon, with the agencies being instructed to formulate catch-up plans and to frontload the implementation of their programs.
As there have been typhoons and flooding in some areas of the country recently, the use of our Quick Response Fund and other disaster-related budgetary instruments is advised. Fiscal stimulus activities are also underway to increase the productive capacities of both the public and private sectors.
As far as inflation is concerned, we know it has been decelerating these past months, reaching 4.7 percent in July 2023. But to maintain stability in prices in the midst of weather and climate disturbances, trade tensions, and the imposition of export bans in some countries, the Philippine government will continue to intensify its supply-side interventions and demand-side management measures. This, along with the implementation of targeted measures to protect vulnerable sectors from the effects of high inflation.
Our economists will be monitoring the effects of the global economic slowdown and the recent wave of trade protectionism while facilitating the diversification of external markets with the view of extending better opportunities to our exporters. Domestic and external developments will be closely monitored so we are always ready to make policy adjustments, as needed. Aside from monitoring, consultations with sectors and stakeholders affected by the global slowdown and other economic shifts are important in designing policies and assistance measures. This way, their actual needs can be assessed and addressed efficiently.