Among major sectors, services grew 4.5 percent, while agriculture, forestry and fishing increased 2.7 percent. The industry sector, however, declined 2.4 percent, pulling down overall economic performance.
On the demand side, household consumption rose 2.8 percent, government spending increased 8.3 percent, and exports of goods and services climbed 12.2 percent. Meanwhile, gross capital formation dropped 9.2 percent, reflecting weaker investment activity during the quarter.
Infra projects to be prioritized
Balisacan said the government will prioritize accelerating infrastructure projects, improving governance, and restoring investor confidence to strengthen growth prospects.
“We will accelerate the implementation of high impact infrastructure projects,” he said, adding that agencies will pursue catch-up plans with clear milestones and accountability measures.
The DepDev chief also highlighted efforts to protect purchasing power, strengthen food and energy security, expand trade opportunities and prepare Filipino workers for emerging industries such as artificial intelligence.
“We remain mindful of the risks ahead — uncertainties surrounding the Middle East conflict, elevated oil prices, tighter financial conditions, and the prospect of El Niño and further typhoons,” Balisacan said.
He added that the government’s focus moving forward is to “accelerate investment, protect purchasing power, strengthen domestic production, and raise the competitiveness and productivity of our firms and workers” to translate economic recovery into more jobs and higher incomes for Filipinos.
Temporary numbers
Malacañang, meanwhile, stressed that even if the country’s GDP has further decreased to 2.3 percent from 2.8 percent in the last quarter — considered to be the lowest in five years, the numbers are just temporary and the economy will eventually bounce back.
A statement issued by the Palace said, “We acknowledge that the country’s economic growth in the second quarter was 2.3 percent. This result was lower than we had hoped. The numbers show the challenges we have faced, but they do not determine the country’s long-term direction. This slowdown is only temporary.”
Malacañang attributed the impact of the Middle East conflicted for the lower GDP growth, which it said has hiked fuel prices, and inflation, affecting jobs and remittances along with a temporary slowdown in public construction as the government increased efforts to address corruption in infrastructure spending.
“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,” it said.
Although consumer confidence is still low, the government maintained that businesses are starting to improve, and manufacturing activity continues to expand, supported by strong global demand for technology products and the expected recovery of infrastructure spending.
Focused on growth acceleration in 2H
“The Marcos administration is focused on accelerating growth in the second half of the year by fast-tracking high-impact infrastructure projects, maintaining price stability, continuing targeted assistance for vulnerable sectors, including the expanded UPLIFT assistance reaching 7.5 million families, the P12/L Fuel Subsidy Program and the Bawat Bayan Makikinabang Rice Program, expanding exports and improving competitiveness, positioning the Philippines to benefit from the global AI and digital economy through investments in skills, technology and higher-value industries, such as Pax Silica,” the Palace statement read.
Apart from those interventions, Malacañang stressed that the Executive has key Legislative-Executive Development Advisory Council measures intended to support the middle class and consumption, including the proposed EPIRA amendments banning distribution utilities and electric cooperatives from passing system loss charges and their corresponding VAT on to ordinary consumers, the Sariling Kuryente Act, the increase in the personal income tax exemption threshold to P350,000, the Minimum Corporate Income Tax exemption for small businesses, General Tax Amnesty and Travel Tax abolition, among others.
