JOINT STATEMENT BY THE ECONOMIC MANAGERS ON THE PHILIPPINE ECONOMIC PERFORMANCE FOR THE SECOND QUARTER OF 2023

As the Philippine Statistics Authority reported, the Philippines’ gross domestic product (GDP) for the second quarter of 2023 expanded at a moderate pace of 4.3 percent. This brings our real GDP growth to 5.3 percent for the first semester of the year.

To achieve the target growth rate of 6-7 percent for the year, the country’s GDP needs to grow by at least 6.6 percent in the second half of 2023. Notwithstanding the challenges, we believe this is still attainable.

It is important to recognize the underlying growth drivers for the year’s first half. Employment and jobs are at historic high levels, tourism growth areas are back, investment registration activities have significantly increased, and our students are back in school.

Since the opening of the economy last year, we have seen improvements in labor and employment conditions, with the services sector continuing to be a reliable source of economic activity, particularly with the recovery of food services and accommodation. We also note that both unemployment and underemployment rates have been declining while the labor force participation rate has been increasing, which implies that net employment generation has also been growing.

For the second quarter, the moderate economic expansion was driven by increases in tourism-related spending and commercial investments, but was tempered by high commodity prices, the lagged effects of interest rate hikes, the contraction in government spending, and slower global economic growth.

While government expenditure contracted by 7.1 percent in the absence of election-related spending in the first half of the year, government spending will accelerate in the coming quarters to allow us to recover our growth momentum.

To do this, we will accelerate the execution of government programs and projects, including the delivery of public services, under the 2023 national budget. Indeed, the Economic Development Group (EDG) has already been discussing how various government agencies can expedite the implementation of programs and projects for the rest of the year. Government agencies, including local and regional government entities, are encouraged, if not instructed, to formulate catch-up