THE government is banking on faster budget execution and stronger project implementation to help accelerate economic growth after a first-quarter slump, a Cabinet official said.
“We really would like to catch up after the first quarter growth and the inflation that we've had,” Budget Secretary Kim Robert de Leon told reporters last week.
“[W]e're trying to really be bullish about it and utilize whatever we can utilize to support the economy,” he added.
Gross domestic product (GDP) growth slowed to 2.8 percent in the first quarter, well below the government’s downwardly revised 5.0- to 6.0-percent target for 2026.
Officials have blamed the result on the lingering effects of a massive flood control project scandal that had led to a fourth-quarter growth slowdown to 3.0 percent last year and the impact of the ongoing war in the Middle East.
De Leon said economic managers were focused on ensuring that government agencies promptly utilize available funding to support economic activity.
“We have seen an increase in available releases. The agencies now have until June to implement their projects and we hope this will contribute to economic growth in the second quarter,” he said.
Government spending markedly slowed in the first quarter, growing by just 4.8 percent compared to 18.7 percent a year earlier. Household spending also slowed to 3.0 percent from 5.38 percent while capital formation contracted by 3.3 percent, reversing from 4.5-percent growth in Jan-March 2025.
The Budget chief declined to provide a growth estimate for the second quarter, only saying “my goal is really to make available what we can make available to support the economy.”
Target revisions ‘not yet final’
The first-quarter growth slump has prompted the interagency Development Budget Coordination Committee (DBCC) to reassess its economic assumptions.
De Leon, who is chairman of the DBCC, said officials were still carefully evaluating developments before making any announcements despite having met recently.
“We're not yet final with the figures. At the proper time, we'll be announcing the final assumptions,” he said.
“We didn't make an announcement because we wanted to recalibrate the figures that we saw during the meeting. We're having another round before we make a final announcement.”
De Leon said economic managers remained focused on using available fiscal tools to support growth and improve economic performance in the succeeding quarters.
“If there are correcting measures that we can implement, we will do that. If that is what is needed for us to be back to our trajectory,” he said.
"The figure remains highly tentative because it is still evolving. We want to finalize it first and, of course, submit our recommendation to the president at the proper time.”
The DBCC last December lowered this year’s GDP growth target to 5.0-6.0 percent from 6.0-7.0 percent, citing the impact of the corruption scandal and global trade uncertainties.
The goals for 2027 and 2028 were also changed to 5.5-6.5 percent and 6.0-7.0 percent from 6.0-8.0 percent.
