PHILIPPINE economic growth has yet to steady following a severe downturn during the Covid-19 pandemic with last year's result — 5.5 percent — falling below target after a 7.6-percent surge in 2022.

Optimism about a post-pandemic rebound was dashed by surging inflation, and government underspending also did little to help. There appeared to be no lack of headwinds, particularly from geopolitical and other issues that continue to impact countries worldwide.

Economic managers have since tempered expectations with the growth goals for this year and the next — 6.0-7.0 percent and 6.5-7.5 percent, respectively — back at what they were at in 2022 and 2023.

After a below-target start to 2024 — first quarter growth was just 5.8 percent — a better-than-expected 6.3-percent showing for April-June pulled the year-to-date average to 6.0 percent.

This has led to officials expressing confidence that the 6.0- to 7.0-percent target will be achieved, particularly with inflation well below last year's record high and monetary authorities having cut key lending rates.

Some analysts, however, are not as confident, noting that the domestic consumption that had buoyed growth appeared to be slowing and that the impact of rate cuts would take time to work its way through the economy.

Still, they expect Philippine growth to remain one of the strongest in the region — a point that the government has continued to stress amid ongoing challenges.

Budget Secretary Amenah Pangandaman told The Manila Times that government spending would improve in the third quarter and fully accelerate in the last three months of the year.

"We will ramp up government spending and help induce economic growth by improving our procurement system and strictly monitoring agencies' budget utilization," she added.

Given a currently high utilization rate, Pangandaman said the government was "currently on track to achieving our growth targets, especially for 2024."

As of the first half, spending on infrastructure projects was said to have risen to P611.8 billion, 20.6 percent higher than the previous year's P507.2 billion and equivalent to 5.7 percent of gross domestic product (GDP).

Pangandaman said for next year, the Marcos administration's flagship infrastructure program, Build Better More, would receive a budget of P1.507 trillion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said maintaining growth near or at 6.0 percent in the coming quarters was possible due to favorable demographics and the ongoing recovery of various businesses.

Increased government spending on infrastructure and other projects could further boost growth, he added.

Moody's Analytics economist Sarah Tan, meanwhile, said consumer spending was likely to continue driving much of economic growth.

Since the country's economy relies heavily on domestic activity, "Resilient private and public spending as well as strength in the services sector should lead to full-year GDP of 5.9 percent in 2024," she added.

While the forecast falls below the government's goal for the year, Tan said the Philippines would, again, outperform many of its regional peers for a third year running.

She added that a rebound in consumer spending and a better global trade environment would drive growth to 6.0 percent next year; albeit, again, below target.

Union Bank of the Philippines chief economist Ruben Carlo Asuncion, likewise, said a consumption recovery would help boost growth.

Disinflation should boost purchasing power and help counteract a technical recession in consumption seen in the second quarter, he added.

"We continue to expect familiar catalysts [such as] construction and solid nonfarm employment onshore to name a few triggers to support 2H (second half) prospects," Asuncion continued.

He raised his growth forecasts to 6.2 percent for this year from 5.8 percent previously.

"As much of the world's central banks start to ease interest rates, we see economic growth to start gearing up from 2025 onwards," Asuncion said, adding that the expansion could reach as high as 7.0 percent by 2029-2030.

"The 10-year economic growth prospects, starting 2025 onwards, are expected to be upbeat for the PH economy, barring headwinds such as geopolitical risks that can hostage economic growth prospects and inject uncertainty in financial markets and the macroeconomy in general," he explained.