MANILA -- The Philippines can still achieve its economic growth target this year, the head of the National Economic and Development Authority said on Friday.

NEDA Secretary Arsenio Balisacan said the country can achieve the lower end of its 6 to 7 percent target growth range if government spending ramps up in the third and fourth quarters.

"At least the lower end yes, of the range of 6 to 7 percent, that still within reach. I think the slowdown that we saw in the second quarter could be offset by a more aggressive fiscal spending in the third quarter," he said.

The Philippine economy grew at a slower pace of 4.3 percent in the second quarter amid high inflation and interest rates.

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At least three multilateral agencies and market observers have downgraded their growth forecasts for the Philippines, citing high interest rates and weaker external demand.

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Balisacan said he expects domestic demand to continue to drive growth.

"I do think that a big part of our economic growth is very much domestic' he said, adding that domestic demand powers almost three-quarters of growth.

He acknowledged, however, that inflation remains a key issue for the Philippines.

"Our estimates for example show that last year, in the first half, inflation was about 4.4 percent, right? And if we would have had that kind of inflation in the first half of this year, we could have had 0.2, 0.3 percentage points (gross domestic product) growth more than what we had."

But the official stressed that core inflation--which strips out volatile food and energy items--has been declining.

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Balisacan said rice inflation may be slower in September after the government imposed a controversial price cap on its regular and well-milled varieties.

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Asked when the price cap would be lifted, Balisacan said, "Very soon."

"Even the president is aware of the dangers of a long and unnecessary price cap," he said.

--ANC, 29 September 2023