MANILA, May 9, 2024 (BSS/AFP) - The Philippine economy grew slightly less than expected in the first three months of the year, data showed Thursday, owing to persistent inflation and a widespread drought.

The 5.7 percent expansion in January-March was well down from the 6.4 percent posted in the same period last year earlier but a slight improvement on the previous three months, national statistician Dennis Mapa told reporters.

The reading was also below the median analysts' forecast of 5.9 percent, which Ser Percival Reyes of the Ateneo Center for Economic Research and Development told AFP was "quite disappointing".

"Actually this was anticipated by the government, inflation and the extreme heat, but the economic effects came out to be extreme," Reyes said.

Large areas of the country were hit by an El Nino-induced drought during the period, ravaging farms, before it was hit by extreme heat in the past two months.

The agriculture sector grew 0.4 percent, a sharp slowdown from the 2.2 percent growth logged in the first quarter of 2023, pushing up food prices. 

But while the reading was below the government's 6-7 percent target, Economic Planning Secretary Arsenio Balisacan hailed the data as proof of the country's economic "resilience". He added that goal was still within range.

"Construction slowed down, no doubt affected by prolonged periods of extreme heat," Balisacan said. "Household spending also slowed due to elevated prices of major food items and the heatwave."

The 4.6 percent increase in household consumption was the slowest since the third quarter of 2010, excluding the pandemic years.

Mapa said the growth was driven by financial activities, wholesale and retail trade and manufacturing.