By Anna Leah Gonzales | Philippine News Agency
The government will pursue reforms to boost economic growth amid current local and global challenges, the Department of Economy, Planning, and Development (DEPDev) said Friday.
Philippine economic growth settled at 2.3% in the second quarter of the year, down from the 5.4% recorded in the same quarter last year.
In a briefing, National Statistician Dennis Mapa said among the major economic sectors, agriculture, forestry, fishing, and services grew by 2.7% and 4.5%, respectively.
Industry, however, declined by 2.4% due to the sharp contraction of public construction.
DEPDev Secretary Arsenio Balisacan said the decline was primarily driven by the continued cautiousness of infrastructure-related agencies.
“Partly because measures are being put in place to ensure that similar incidents will not happen again in the future and also the effects of cases that have been filed against perpetrators,” Sec. Balisacan said.
Domestic demand remained subdued while total investment continued to contract as public construction declined.
Household consumption growth moderated to 2.8% from 5.2% last year amid higher inflation, job losses, and lower remittance receipts due to the Middle East conflict.
The government’s final consumption expenditure likewise slowed to 8.3% from last year’s 8.7%.
Agriculture, forestry, and fishing; and Services, however, posted year-on-year growth in the second quarter of 2026, with 2.7% and 4.5%, respectively.
Balisacan said agricultural output recovered due to favorable weather conditions.
Exports of goods and services accelerated to 12.2% from 4.9% in the same quarter last year.
Imports of goods and services likewise picked up to 5.5% from 3.6%.
“While the second-quarter result calls for decisive actions, recent indicators give us reason for cautious optimism that the economy may already be entering the early stages of recovery,” Balisacan said.
He said private-sector indicators are also becoming more encouraging, noting that the latest business expectations survey already indicates a more optimistic outlook in the coming months.
“Together, these developments suggest improving business confidence and production conditions,” he said.
Sec. Balisacan also expressed hope that inflation would continue to ease in the coming months.
“We expect inflation to continue its downward trend. We hope that these disruptions in the Middle East will moderate, will continue to moderate,” he said.
Growth target still achievable
Balisacan said that despite the slowdown in the first half, he is optimistic that government reforms would help boost economic growth in the second half of the year.
He said he is also optimistic that the Philippines would be able to sustain its upper-middle-income status.
To reach the lower end of the 3.5% to 4.5% economic growth target this year, Balisacan said, the Philippine economy needs to grow by at least 4.4% in the second half of the year.
“This will be demanding, but the target remains within reach if we act with urgency, discipline, and close coordination across government,” he said.
Balisacan said public construction and infrastructure spending will likely pick up in the second half of the year, noting that the Department of Budget and Management already began releasing mobilization funds for 2026 infrastructure projects to the Department of Public Works and Highways.
The government, he said, would accelerate the implementation of high-impact infrastructure projects.
“Implementing agencies will carry out catch-up plans with clear milestones and accountability measures, including seeking the necessary exemptions for projects covered by restrictions related to the Bangsamoro parliamentary election, to prevent delays and the underutilization of funds,” he said.
He said the government will also deepen governance reforms, strengthen transparency, streamline business processes, and rebuild investor confidence.
The Legislative-Executive Development Advisory Council (LEDAC) will also prioritize the passage of 33 key measures that will advance critical governance and anti-corruption reforms, strengthen economic resilience and energy security, and boost human capital development.
Balisacan assured that the government will continue to provide cash assistance, fuel and fertilizer subsidies under the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) Framework.
The Department of Agriculture will also expand support for farmers and fisherfolk, maintain strategic food buffers, and fully operationalize the El Niño Strategic National Action Plan.
For energy, Balisacan said the government will continue to promote renewable energy, enhance competition, and pursue grid expansion and modernization to help ease pressure on electricity prices.
He said the government is also working to conclude trade negotiations with the European Union, Chile, and Canada, while seeking reconsideration of the United States’ 12.5% tariff on selected Philippine exports.
Sec. Balisacan said the government is also banking on the use of artificial intelligence to boost growth.
“We remain mindful of the risks ahead. Uncertainty surrounding the Middle East conflict, elevated oil prices, tighter financial conditions, and the prospect of El Niño and further typhoons could weigh on the recovery. The government will continue to monitor these developments closely and respond in a timely and targeted manner,” he said.
“The latest indicators tell us that the foundations for a recovery are taking shape. Our task now is to sustain this momentum and translate it into more jobs, higher incomes, and better opportunities for every Filipino.”
