MANILA, Philippines – The research arm of debt watcher Moody’s projected the country’s gross domestic product (GDP) to have grown at a slower pace at 6.6% for the second quarter of 2018. 

The forecast released on Friday, August 3, was lower than the 6.8% growth registered in the 1st quarter of the year and the 6.7% expansion in the second quarter of 2017.

Economic managers aimed the GDP to hit 7%.

The GDP is the value of all finished goods produced within a country in a specific period. It is considered as the godfather of indicators as it measures a country’s overall economic activity.

Moody’s said the lowered expectations was partly due to inflation.

“Headline inflation is at a 5-year high and is well above the Bangko Sentral ng Pilipinas’ target band of 2-4%, which has prompted two policy rate hikes this year,” Moody’s Analytics said in its Asia Pacific Economic Preview.

Headline inflation in June clocked in at 5.2%, which broke government estimates. Analysts projected July to breach another 9-year high. (READ: Arroyo meets with economic managers on inflation)

Socioeconomic Secretary Ernesto Pernia was previously quoted as saying that he expected GDP to grow, but inflation was the “spoiler.”

However, Moody’s remained optimistic and expected the economy to remain robust.

“Consumer spending is healthy, thanks to steady inflows of overseas worker remittances and a firm labor market. Investment has been robust and is likely to remain strong, as the government boosts infrastructure development. External demand has remained solid,” Moody’s said.  

Official GDP figures are expected to be released by the Philippine Statistics Authority (PSA) on Thursday, August 9. – Rappler.com