GOVERNMENT underspending impeded the Philippine economy's potential for higher growth in the first quarter of this year, analysts said.Bank of the Philippine Islands senior economist Emilio Neri said the economy could have expanded by 6.4 percent in the first three months of the year if the government had ramped up spending.He noted that the government 'continues to underspend,' with growth of government final consumption expenditure at just 1.
'The cushion provided by government spending in Q1 isn't reliable from one quarter to the next,' Chanco said.He observed that the budget authorities are facing challenges in meeting their recently adjusted target of a 5.6-percent budget deficit as a percentage of GDP for 2024.Despite growth expanding below expectations, Chanco said that the first-quarter results were stronger than anticipated, leading to an upward revision of their full-year GDP growth forecast.