Q1 GDP likely grew by 5.8-6.3%, says Recto

People shield themselves from the scorching sun while walking along EDSA in Quezon City, April 18, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

PHILIPPINE ECONOMIC GROWTH in the first quarter could have settled between 5.8% and 6.3%, Finance Secretary Ralph G. Recto said.

“Anything higher than 5.5% is a win because last year we grew by 5.5%. If we grew by 5.8%, that’s good enough. That should be one of the highest in the region, if not one of the highest in the world,” he told reporters late on Monday.

Gross domestic product (GDP) expanded by 5.5% in 2023. For 2024, the government is targeting 6-7% GDP growth.

“The target is 6%, but because I’m realistic, it seems (first-quarter GDP) may be closer to 5.8%. But there is still hope that we hit the 6% target,” Mr. Recto said in mixed English and Filipino.

“If we get lucky, we could even get 6.3%, that depends on inflation. All of those into account, (we forecast) 5.8% to 6.3%.”

The lower end of Mr. Recto’s forecast would be faster than the 5.5% growth in the fourth quarter, but slower than the 6.4% expansion in the first quarter of 2023.

“In the first quarter last year, growth was high, so we’re starting from a high base. Put that in perspective. If we can achieve 5.8%, that’s good,” he added.

The Philippine Statistics Authority (PSA) is set to release first-quarter GDP data on May 9.

Meanwhile, the Finance chief said that inflation is still the “biggest worry.”

“If we can reduce inflation, GDP growth will be higher. So, we’re looking at that,” Mr. Recto said.

The Bangko Sentral ng Pilipinas (BSP) expects inflation to settle within the 3.5%-to-4.3% range in April. Headline inflation accelerated for a second straight month to 3.7% in March.

Mr. Recto said inflation will likely breach the BSP’s 2-4% target range in the coming months.

“That’s always been expected, maybe in the second or third quarter, according to the BSP. But within the year, we expect that it will still be within the range of 2-4%,” he said.

The BSP earlier cautioned that inflation may temporarily overshoot the 2-4% target band over the next two quarters.

The central bank expects inflation to average 3.8% this year.

Mr. Recto said that economic managers are working on initiatives to manage inflation.

The Inter-Agency Committee on Inflation and Market Outlook met last week to discuss strategies to tame inflation such as boosting agricultural productivity, expediting the issuance of African Swine Fever vaccines and combatting anti-competitive practices, among others.

President Ferdinand R. Marcos, Jr. also recently signed an order that seeks to ease the importation process of agricultural products and remove non-tariff barriers. — Luisa Maria Jacinta C. Jocson