Citing faster government spending, the Development Budget Coordination Committee (DBCC) co-chair expects the Philippine economy to grow by about six percent in the third quarter, bringing growth closer to the midpoint of the full-year target.

Speaking to reporters on the sidelines of the Department of Budget and Management’s (DBM) launch of its 2024 Agency Performance Review (APR) Report on Wednesday, Aug. 20, Budget Secretary Amenah F. Pangandaman said she expects growth in the third quarter of 2025 to outperform the previous quarter’s 5.5 percent.

Pangandaman, who also co-chairs the Cabinet-level, interagency DBCC, said that she anticipates the country’s gross domestic growth (GDP) to expand by around six percent in particular, citing the resumption of notices of cash allocation (NCAs) after the spending ban during the midterm election season.

“It has started again; we’ve already released the NCAs. Then the agencies have also started procuring again,” Pangandaman noted, adding that spending in the July to August period will be bolstered.

While she did not say her growth expectation for the fourth quarter, Pangandaman said economic expansion for the rest of the year will still be driven by government spending and an influx of investments into the country. As such, she sees full-year growth clocking in close to six percent.

If realized, Philippine economic growth would achieve the government’s downscaled target of 5.5 to 6.5 percent. This was tweaked downwards by the Marcos Jr. administration’s economic managers in June from six to 6.5 percent previously.

Cited as risk factors were heightened external uncertainties, especially the recently subsided Middle East conflict and the higher United States (US) tariffs on Philippine exports.

Data from the Philippine Statistics Authority (PSA) showed the Philippine economy expanded by 5.5 percent in the second quarter, one-percentage-point (ppt) slower than the 6.5 percent recorded in the same period last year. While significantly slower than last year’s, this pace remained faster than the first quarter’s 5.4-percent growth.

This four-quarter-high economic growth also hit the lower end of the government’s lowered target. However, Philippine growth trailed behind the Southeast Asian region’s best performer, Vietnam, which grew its economy by eight percent during the April to June period.

To note, growth in government spending, on which Pangandaman pins her hopes, slowed to 8.7 percent from 18.7 percent in the previous quarter and 11.9 percent last year. It also posted the slowest pace in three quarters, or since the five percent recorded in the third quarter of last year. 

Meanwhile, household spending grew by 5.5 percent year-on-year in the second quarter, higher than the 4.8 percent in the same quarter last year.