Consumption ‘not enough’ to push GDP growth past 5-6%, BPI says

THE ECONOMY requires stronger industry spending if gross domestic product (GDP) is to move beyond its current growth track, the Bank of the Philippine Islands (BPI) said.

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“Recent growth in the 5-6% range suggests that consumption alone is no longer enough to drive the economy forward. While domestic demand remains robust, the economy doesn’t produce a significant portion of what it consumes, reflecting its weakness in production. The industry sector must take a bigger role in supporting growth,” BPI Lead Economist Emilio S. Neri, Jr. said ina report.

The economy expanded by an annual 5.5% in the second quarter, hitting the lower end of the government's 5.5-6.5% target for the year.

For the first half, GDP growth averaged 5.4%, against 6.2% a year earlier.

Household final consumption, which accounts for over 70% of the economy, grew 5.5% in the three months to June, exceeding the 4.8% posted in the second quarter of 2024.

Mr. Neri noted household consumption still has not recovered to pre-pandemic levels.