In a statement released by Moody's Analytics, the said increase followed from the four quarters of spectacular growth that have put the country on track to comfortably meet its GDP growth target of 7 percent to 9 percent in 2022.
"Private consumption and investment will buoy second-quarter growth," the statement said.
However, the economic expansion might slow down in the second half of the year due to higher inflation, rising interest rates, and fiscal consolidation.
Moody's stated, the Philippines’ headline inflation continues its upward trend hitting 6.4 percent y/y.
The statement said this brought the national year-to-date inflation reading to 4.7 percent, which is close to the 5 percent inflation forecast for 2022 that Bangko Sentral ng Pilipinas revised in June.
“Similar to June, the food and non-alcoholic beverages segment and transport were the main drivers of inflation, rising 6.9 percent y/y and 18.1 percent y/y respectively,” the Moody’s analytics said.
It stated that In July, a sugar shortage caused sweetener prices to surge, with sugar confectionery and dessert prices up by 17.6 percent y/y.
“Oil prices , on the other hand , are on a downward trend,” the statement said.
The price of Brent crude oil fell below 100 dollars per barrel in July amid recession fears while the Consumer Price Index (CPI) for housing, water, electricity, gas and other fuels have decreased by 5.7 percent y/y.
The Moody’s analytics said the falling oil prices will take out of transport prices but it is early for them to determine whether the inflation has already reached its peak.
“But, inflation is likely to loose steam in the fourth quarter,” Moody's said.
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