Malacañang expressed confidence that the Philippine economy will rebound in the second half of the year following a slowdown to 2.3% growth in the second quarter, driven by plans to accelerate public spending and infrastructure project execution.
Palace Press Officer and Communications Undersecretary Claire Castro acknowledged that the latest quarterly performance missed official targets, but maintained that the dip is a temporary setback rather than a long-term trend.
“We acknowledge that the country’s economic growth in the second quarter was 2.3%. This result was lower than we had hoped,” Castro said. “The numbers show the challenges we have faced, but they do not determine the country’s long-term direction. This slowdown is only temporary.”
Castro noted that economic activity is set to gain momentum in the coming months as government agencies fast-track budget disbursements and scale up public expenditures.
“As the government continues to speed up spending and release budgets more quickly, we hope the economy can start to pick up in the second half of the year as well,” she added.
The weaker second-quarter figures were linked to external and domestic headwinds, including Middle East geopolitical tensions affecting fuel prices, inflation, employment, and remittances, alongside a drop in public construction.
Castro attributed the temporary reduction in state-funded construction to tighter anti-corruption vetting for infrastructure spending.
To revitalize momentum, the administration is focusing on accelerating key infrastructure works, stabilizing inflation, and maintaining targeted relief programs such as the expanded UPLIFT program for 7.5 million families, a ₱12-per-liter fuel subsidy, and the Bawat Bayan Makikinabang Rice Program.
Despite the broader deceleration, key sectors demonstrated strong resilience:
- Exports: Surged by 12.2%, bolstered by strong international demand for semiconductors, electronics, agricultural goods, and artificial intelligence-related exports. Merchandise exports marked double-digit expansion for a fifth consecutive quarter.
- Tourism & Travel Exports: Increased by 12.6% as tourism continued its upward trajectory.
- Sectoral Growth: Agriculture expanded by 2.7%, while manufacturing recorded a 2.6% rise.
Looking ahead, Malacañang aims to enhance global competitiveness and leverage the expanding digital and AI economies—including strategic investments in high-value industries like Pax Silica—through workforce upskilling and technology integration.
Furthermore, the Palace highlighted key Legislative-Executive Development Advisory Council (LEDAC) priority measures aimed at boosting middle-class purchasing power and domestic consumption.
These include raising the personal income tax exemption threshold to ₱350,000, scrapping the travel tax, passing a general tax amnesty, exempting small businesses from minimum corporate income tax, and reforming energy laws—such as EPIRA amendments and the proposed Sariling Kuryente Act—to protect consumers from system loss charges and added taxes.