Philippines GDP slows to 6.4% in the first quarter 2023

In the first quarter of 2023, Philippine Gross Domestic Product (GDP) increased by 6.4%. This was the country's lowest growth rate in seven quarters since it began to recover from the pandemic in the second quarter of 2021. This is compared to the 8% GDP growth it saw in the same quarter last year. On a quarterly basis, growth slowed to 1.1% from the previously reported 2.4% expansion in the previous three months.

The statistics were announced by the Philippine Statistics Authority on 11 May, according to the Philippine News Agency. While the GDP growth appears to be a slowdown, the National Economic and Development Authority Secretary Arsenio Balisacan said, the interpretation of a “slowdown” might be misleading as the previous year’s growth “came from a low base”.

He stressed that this is a result of the economy normalising and noted that the "better-than-expected" first-quarter performance this year implies that the country is returning to its high-growth trajectory despite the various challenges and headwinds faced. 

Among the major sectors, the top contributors in the country’s first quarter growth were reportedly wholesale and retail trade, repair of motor vehicles and motorcycle, financial and insurance activities and other services.

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Meanwhile, agriculture, forestry, and fishing; industry; and services all experienced growth in the first quarter of 2023, with 2.2%, 3.9%, and 8.4%, respectively. Balisacan was particularly surprised by the growth of the agriculture sector, especially in El Niño, a condition where dry spells and droughts happen, heavily hit the Philippines in 2022.

While this quarter's growth rate is lower than the 8%, its year-on-year growth rate as seen in the first quarter of 2022 is in line with analyst expectations and is within the government's target range of 6% to 7% for this year.

Balisacan noted that despite various risks and challenges, the economic outlook for the Philippines in the near and medium term, remains solid. He said that he is "confident" that the country will reach its target for this year of 6 to 7 % growth rate and 6.5 to 8 % for 2024 to 2028.

Looking forward, the country will focus on the strategies laid out in the Philippine Development Plan 2023-2028 to ensure the country’s growth. Balisacan said that the strategies call for developing and protecting the capabilities of Filipinos and transforming its production sectors to generate more quality jobs and competitive products while ensuring a conducive overall investment environment in terms of governance and government policies.

Among Southeast Asian countries that have reported their most recent GDP figures, the Philippines grew the fastest, followed by Indonesia (5.03%), Vietnam (3.32%), Hong Kong (2.7%) and Singapore (0.1%).

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