Key Points
Gross domestic product rose 6% in the second quarter from a year earlier, the Philippine Statistics Authority said in a briefing in Manila. That was the weakest pace since 2015, according to data compiled by Bloomberg. The median estimate in a Bloomberg survey of 19 economists was 6.6%; growth slowed from 6.6% in the first quarter. Compared with the previous quarter, GDP grew 1.3%.

President Rodrigo Duterte is building roads and railways, including a subway in traffic-clogged Manila, to boost the economy, which the government is targeting to expand 7 to 8% for this year. Economic Planning Secretary Ernesto Pernia told reporters on Thursday the economy needs to grow 7.7% in the second half to meet this year’s goal.

The surprise slowdown last quarter may not be enough to halt the central bank from hiking interest rates on Thursday, given a surge in inflation to the highest in more than five years. But it throws in doubt whether Governor Nestor Espenilla can deliver on a pledge to take “strong action” with a bigger-than-usual interest-rate hike of 50 basis points, as most economists in a Bloomberg survey had predicted before the release of the GDP data.

“We are still sticking to a 50 basis-point call,” said Angelo Taningco, an economist at Security Bank Corp. in Manila. “They need to combat inflation or else there’ll be a greater impact on second-half growth.”

The benchmark stock index slid 0.8%, erasing earlier gains. The peso fell 0.1% to 53.11 per dollar.

Other details
Consumer spending, which accounts for about 60% of the economy, rose 5.6% in the second quarter from a year earlier.

Government spending gained 11.9%.

Agriculture production rose 0.2%.