The Philippine economy expanded faster than expected in the first quarter, with consumer spending defying elevated inflation and the central bank’s aggressive monetary tightening.
Gross domestic product in the three months through March rose 6.4% from a year earlier, the Philippine Statistics Authority said on Thursday, compared to the 6.2% median estimate in a Bloomberg survey. The economy expanded a revised 7.1% in the last quarter of 2022.
Compared to the previous three months ended December, the economy grew 1.1%, against an estimate of 0.7%.
The performance marks a good start to the year, and provides a boost to the government’s target of achieving 6% to 7% full-year growth. While that pace will still be slower than last year’s 7.6% expansion — the fastest in almost half a century — the Southeast Asian nation is still forecast to be among the region’s bright spots amid a possible global downturn.
The central bank said it will consider first-quarter GDP data and inflation numbers in deciding monetary policy settings next week. The Bangko Sentral ng Pilipinas has raised borrowing costs by 425 basis points since May 2022, and Governor Felipe Medalla has signaled openness to pause the BSP’s most aggressive tightening cycle in two decades at the May 18 meeting amid signs of cooling price pressures.
--With assistance from Tomoko Sato and Clarissa Batino.
