Philippine growth could pick up in Q2 as consumption stabilizes — AMRO

PHILIPPINE ECONOMIC GROWTH could pick up this quarter as household consumption likely improved amid easing inflation, and as exporters may have frontloaded production amid the pause in US reciprocal tariffs, an economist said.

- By Aubrey Rose A.

ASEAN+3 Macroeconomic Research Office (AMRO) Country Economist Andrew Tsang said private consumption should still be stable in the second quarter amid easing inflation and the low unemployment rate.

However, he said it remains to be seen if private investment would see an increase in the second quarter, after a slowdown in the first quarter.

"Overall, I would expect the second-quarter (growth) to be similar to the first quarter but a bit better," Mr. Tsang said in an interview on the sidelines of the BusinessWorld Economic Forum on May 22.

In the first quarter, gross domestic product (GDP) grew by a weaker-than-expected 5.4%, reflecting heightened uncertainty arising from the Trump administration’s tariffs. This was sharply slower than the 5.9% expansion in the same quarter last year, and below the government's 6-8% target for the year.

"We consider both the tariff policy and also consider the Q1 data. Actually, before the tariff policy, we expect 6.3% (GDP growth for the Philippines). And then after the tariff policy and also the sentiment, we already expect there will be a change," Mr. Tsang said.

"We expect this year, it would not be that bad, but still just below 6%," he added.

However, Mr. Tsang said household consumption will rebound this year, as the inflation downtrend continues.

"That's why we expect private consumption would be stronger this year. It’s the main driver of the recovery of the economy," he said.

In the first quarter, household final consumption expenditure, which accounts for over 70% of the economy, grew by 5.3% annually from the 4.7% print in the fourth quarter.