Philippine GDP grew 7.4% in 2Q22 as inflation weighs on consumption

Philippine economic growth fell short of expectations in the second quarter of 2022 as inflation, which reached its highest level in almost four years, weighed on consumption, one of the main drivers of growth.

The Philippine Bureau of Statistics reported today (August 9) that gross domestic product (GDP) grew by 7.4% year-on-year in the second quarter. This represents a slowdown in growth from the first quarter, when it was 8.2%.

“Problems all over the world especially inflation from imports of goods. This includes energy and food imports. This is clearly the cause of the Philippines’ economic slowdown,”

Philippine Economic Planning Minister Arsenio Balizakan said in Manila.

Household spending contracted by 2.7% in the second quarter compared to the first quarter. Meanwhile, inflation was above the central bank’s target of 2% to 4% in the second quarter, rising to 6.4% in July, the highest level since October 2018.

The latest GDP figures may help the Philippine central bank to slow down its key rate hikes. The Philippine central bank signaled a 0.25% and 0.50% hike in its policy rate on Aug. 18 and could raise it further for the rest of the year.

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