MANILA, May 7 (Reuters) - The Philippine economy grew 2.8% in the first quarter, the country's statistics agency said on Thursday, lower than forecast, constrained by the crisis in the Middle East and a delayed budget passage.
Economists in a Reuters poll had expected first quarter gross domestic product growth to reach 3.5%.
"The lingering effects of oil prices and (the impact) on supply chains will persist in the coming months, there are continuing challenges ahead," Economic Planning Secretary Arsenio Balisacan told a press conference.
On a seasonally adjusted basis, the economy grew 0.9% quarter-on-quarter in the January-March period, lower than the 1.5% expansion forecast in the poll.
Balisacan said the slower expansion reflected the combined impact of "significant domestic and global challenges", including delays in the passage and release of the 2026 budget and the effects of rising prices on domestic consumption.
He said the government would push to regain growth momentum in the months ahead and accelerate spending, including on infrastructure. The growth target would be adjusted downwards due to global uncertainty, he added.
Household consumption growth also slowed to 3.3% on the year in the first quarter, compared to 3.8% in the previous three months. Government spending rose 4.8%, compared to 3.7% in the previous quarter.
Investment growth declined to 3.3% compared to a year earlier, reflecting the sustained lack of investor confidence.
"Looking ahead, while global uncertainty remains elevated, we remain firmly focused on strengthening the country's economic foundations and regaining stronger growth momentum in the succeeding quarters and further ensure budget support for various measures," Balisacan said.
Annual inflation accelerated to a three‑year high in April, data showed on Tuesday, as a surge in fuel costs stemming from the Middle East conflict raised the prospect of further monetary tightening.
Consumer prices rose 7.2% last month, the highest since March 2023, breaching the central bank's forecast range of 5.6% to 6.4% for the month.
Reporting by Nestor Corrales in Manila and Mikhail Flores in Cebu; Writing by Martin Petty; Editing by David Stanway
Source: Reuters