Department of Finance Secretary Ralph Recto believes that the economy during the second quarter of the year expanded beyond the 5.4 percent growth recorded in the previous quarter.

"I think the second quarter, for sure, will be better than the first," he said Wednesday in a meeting with the media in Pasay City.

Recto said robust spending by the government and households should accelerate economic growth amid easing inflation and interest rates.

PSA data on household consumption

According to the Philippine Statistics Authority, household consumption of goods and services accounts for over 70 percent of the national gross domestic product.

In the first quarter of 2025, household spending grew by 5.3 percent from the 4.7 percent recorded in the fourth quarter of 2024.

This was after inflation continued to slow to 1.8 percent in March from 2.9 percent in January.

Interest rates benchmark eased

The Bangko Sentral ng Pilipinas also eased the benchmark for interest rates by a total of 75 basis points to 5.75 percent in the previous year, further encouraging the public to purchase goods and services through loans in the following months.

In terms of government spending, data from the Bureau of the Treasury (BTr) showed it recently rose to P578.2 billion in May from P454.8 billion in April.

BTr said the growth was driven by salary adjustments to civilian government employees and fund allocations to local government units from the national revenues.

Given a relatively stable global economy, Recto said the Philippine economy should grow "realistically" by an average of 5.7 or 5.8 percent for the full year.

Economy could further expand

However, he said the economy might further expand if US President Donald Trump agrees to reduce the tariff on Philippine goods below 20 percent.

"The target is 6 percent for the year, so far. But there is a lot of uncertainty with trade policy, and nothing is final yet regarding the Trump tariffs," Recto said.