The Philippine economy slowed down in the second quarter to a five-year low of 2.8 percent as concerns over the Middle East situation, lower government spending and household consumption weighed down growth, the government said Friday.

In a press conference, Undersecretary and National Statistician Claire Dennis Mapa announced that the gross domestic product (GDP) in April to June grew to 2.3 percent, slower than the 2.8 percent growth in the first quarter.

"Based on history, this 2.3 percent in the second quarter is the lowest since Q1 (first quarter) of 2021 during the pandemic when our growth was at -3.8 percent," he said.

"If we remove that period, this is the lowest since Q4 (fourth quarter) of 2009 when our GDP growth during that time was recorded at 1.8 percent," he added.

Construction went down 14.8 percent from 4.3 percent decline in the first quarter. Investment declined 9.2 percent.

Household spending, a key engine of economic growth, lowered ​to 2.8 percent from three percent in the previous quarter due to inflation.

Despite the slowdown, Economy, Planning, and Development Secretary Arsenio Balisacan expressed optimism that what is being experienced right now is "transitory" and "temporary".

"Domestic demand remained subdued, mainly because total investment continued to contract as public construction declined. Household consumption growth also moderated amid higher inflation, job losses, and lower remittance receipts arising from the Middle East conflict," he said.

"While the second-quarter result calls for decisive actions, recent indicators give us reason for cautious optimism that the economy may already be entering the early stages of recovery", he added.

Balisacan also noted that "the Bangko Sentral ng Pilipinas' June business expectations survey showed a more optimistic outlook for the next three months."

To meet the government's annual growth target of 3.5 to 4.5 percent, Balisacan stressed that the economy must grow by at least 4.4 percent in the second semester.

"This will be demanding, but the target remains within reach if we act with urgency, discipline, and close coordination across the government," he said.

In a statement, Presidential Communications Undersecretary Claire Castro said the result ''was lower than we had hoped.''

“The numbers show the challenges we have faced, but they do not determine the country’s long-term direction. This slowdown is only temporary,” she said.

“It is the result of unusual events, especially the impact of the Middle East conflict, which has affected inflation, fuel prices, jobs, and remittances, along with a temporary slowdown in public construction as the government increased efforts to address corruption in infrastructure spending," Castro stated.

"As the government continues to speed up spending and release budgets more quickly, we hope the economy can start to pick up in the second half of the year as well,” she added. Robina Asido/PHS