The Philippine economy had a lackluster performance in the last 6 months, and way off analysts' forecast, as the country gets encumbered with delays in the budget that hampered government spending, officials said on Thursday.
Based on data by the Philippine Statistics Office, the economy improved by a measly 5% in the second quarter of this year, its slowest in as many years, and weaker compared to its 5.5% gross domestic product growth in the first quarter, and the 6.3% figure in the second quarter of the year.
The GDP figures compare with the median estimate of nearly 6% in a separate survey conducted by Reuters and Bloomberg. This sluggish economic performance, Socio-economic Planning Secretary Ernesto Pernia Jr noted, is "caused by the continuing effect of a delay in the passage of the national budget, coupled with the election ban."
Presidential Spokesperson Salvador Panelo said President Rodrigo Duterte's economic managers are doing their best to lift the country's economy. "According to our economic managers, this is all temporary," Panelo said during a media conference, Wednesday.
Constraints in national spending played a crucial role in the Philippines' economic slump. According to National Economic Development Authority Undersecretary Rosemarie Edillon, the country's growth would have been one percent higher in the latest quarter "had spending been on track."
As such, NEDA pointed out that the country's economy has to move up by an average of 6.5% in the next 6 months to hit the low-end of a full-year target of 6% to 4% this year.
The national budget was enacted into law only in April this year after congressmen debated over last-minute adjustments. On the other hand, the Commission on Elections did not respond immediately to queries by the government's economic committee to exempt important infrastructure projects from the spending restriction during the election period.
Torpid growth has added more burden on the Bangko Sentral ng Pilipinas to slash interest rates during a policy meeting late Thursday. Economists surveyed by Reuters saw a 25-basis point cut in overnight lending rates used by banks to set loan price.
On Thursday, the Philippine Statistics Office reported that the services sector grew fastest at 7.2% while industry moves up by 3.8% in the April-June period. Fishing, forestry, and agriculture posted a slight advance of 0.7%. Manufacturing, trade, and repair of motor vehicles were also among the economy's main growth drivers.
