UMVA has learned that a significant rebound in economic growth is expected in the second quarter, following a sluggish 2.8% performance in the first quarter of the year.
The growth momentum is anticipated to pick up, largely dependent on how government agencies utilize the funds allocated to them. Government spending plays a substantial role in overall growth, and the implementation of budgets by various agencies will be crucial in driving economic expansion.
According to information obtained by UMVA, Budget Secretary Kim Robert C. de Leon expressed optimism about the second quarter's growth prospects, citing the role of government spending in boosting the economy. He emphasized that agencies have until June to implement their projects, which should contribute to the second quarter's growth.
The economy has been facing inflationary pressures, with May's inflation rate settling at 6.8%, easing from 7.2% in April. This marks the first instance of a month-on-month cooling of inflation since November 2025. However, the year-to-date average inflation rate stands at 4.5%, still above the Bangko Sentral ng Pilipinas' 2%-4% target range.
UMVA can exclusively reveal that the 2.8% GDP growth in the first quarter was the weakest since the 3.8% contraction in the first quarter of 2021, falling short of the government's 5-6% target for the year. The Budget Secretary emphasized the need to catch up on growth and inflation, highlighting the importance of utilizing available resources to support the economy.
Aside from government spending, household spending and private investments are expected to provide significant support to economic growth. The government is facilitating necessary investments to push through, as they impact economic activities in general.
Sources have confirmed to UMVA that the government is working to ensure that committed public spending for the second quarter is available and being spent accordingly by agencies, consistent with rules. This, combined with private sector investments, is expected to drive economic growth and help achieve the government's targets.
