THE government is on track to achieving its growth targets in the first quarter of 2023 with the gross domestic product (GDP) growth of 6.4 percent year-on-year (YoY) despite high inflation, a Cabinet official said on Thursday.

“The sustained trajectory of the country’s output is a welcome development as we navigate through an uncertain global outlook,” Finance Secretary Benjamin Diokno said.

On a quarter-on-quarter (QoQ) basis, the economy has registered a growth of 1.1 percent from 2.0 percent in the previous quarter.

The GDP outturn beats private analysts’ median forecast of 6.0 percent and is well within the Development Budget Coordination Committee (DBCC)’s growth target of 6.0 percent to 7.0 percent for 2023.

Furthermore, Diokno said the economy’s performance is much faster than China with (4.5 percent), Indonesia (5.0 percent), Singapore (0.1 percent), and Vietnam (3.3 percent).

Domestic demand in the first quarter expanded, led by household consumption (6.3 percent), investments (12.2 percent), and government spending (6.2 percent).

Meanwhile, exports and imports of goods and services grew by 0.4 percent and 4.2 percent, respectively.

On the supply side, growth across sectors remained broad-based. This was led by services (8.4 percent), industry (3.9 percent), and agriculture (2.2 percent).

Growth in services was mainly driven by Wholesale and retail trade, as well as financial and insurance activities.

On the other hand, growth in Industry was supported by the strong performance of the construction and manufacturing subsectors.

“As we continue to rely on domestic demand to propel the economy toward the growth target, the government remains unwavering in protecting the purchasing power of Filipino consumers by acting swiftly to implement direct measures against inflation,” Diokno said.

“On the fiscal side, the government is committed to a fiscal consolidation path and will continue the implementation of the government’s infrastructure development program of 5 percent to 6 percent of GDP annually as indicated in the Medium-Term Fiscal Framework [MTFF],” he added.

The MTFF aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025, then further down to 51.1 percent in 2028; and reduce the budget deficit to 3.0 percent of GDP by 2028.

As of the first quarter of 2023, the debt-to-GDP ratio was 61.0 percent, down from 63.5 percent in the first quarter of 2022.

The deficit-to-GDP ratio was 4.84 percent in the first quarter of 2023, down from 6.41 percent in the first quarter of 2022.

The finance chief said the government will also continue to leverage on structural reforms, such as the amendments to the Public Service Act (PSA), Foreign Investments Act (FIA), Retail Trade Liberalization Act (RTLA), and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act to build, better, more and foster investment development in the country.

“With the strategies contained in the Philippine Development Plan 2023-2028, we can build a better environment that ensures a consistent path to sustainable and robust growth,” Diokno added.