Philippine growth slows as Malaysian voters and US consumers resist the upbeat numbers
Philippine growth slowed to 2.3 per cent and softened the rate stance; Malaysia's 6 per cent growth failed to reassure voters, while US consumer sentiment also fell in early August.
Economics & Markets··Evening
Manila's 2.3 per cent growth and a softer rate stance
Philippine central bank Governor Eli Remolona called second-quarter growth of 2.3 per cent disappointing, while adding that it was not that bad. Growth fell to its weakest pace since 2021, and first-half expansion came in at 2.6 per cent, short of the government's target range of 3.5 per cent to 4.5 per cent for the year. Weaker growth, Remolona said, lets the bank be less aggressive in trying to tame inflation. July inflation eased to 6.2 per cent from 6.4 per cent, after the central bank raised its policy rate by 25 basis points in June. He still wants a more convincing downward trend in inflation before relaxing, and the board next meets on 27 August. The Star's account therefore pairs a soft growth print with a carefully qualified policy message: disappointment is admitted, but the governor is not treating the quarter as a crisis, and any easing still waits on firmer inflation evidence rather than on the growth number alone.[1]
In Kuala Lumpur, 6 per cent was not enough
In Malaysia, Prime Minister Anwar Ibrahim faced a different problem: strong growth that still failed to persuade voters. He said he would speed up reforms and strengthen the anti-corruption drive after a run of state election defeats. He acknowledged that the economy grew 6 per cent last quarter and unemployment is low, yet living costs remain high. The economic numbers are not winning the hearts of the people, he told the annual congress of his party, PKR. Reform, he argued, has to proceed in stages and take coalition partners into account. Pakatan Harapan, which PKR leads, has done badly in three consecutive state elections in Sabah, Johor and Negeri Sembilan; in Negeri Sembilan it fell to two seats in a 36-seat assembly. The national election is due by February 2028. South China Morning Post's report therefore separates the macro print from the political balance sheet: 6 per cent growth and low unemployment did not buy quiet in the states, and Anwar is answering with a faster reform and anti-corruption pitch rather than claiming the numbers speak for themselves.[2]
US consumer sentiment fell to 51.0
In the United States the University of Michigan's Index of Consumer Sentiment fell to 51.0 in the preliminary August reading from 55.2 in July, a 7.6 per cent monthly drop that ends two months of improvement. The expectations index fell 8.7 per cent to 50.6 and the current conditions index 5.5 per cent to 51.8. Expected business conditions sank 11 per cent for the short run and 17 per cent for the long run. The decline ran across the political spectrum, and the reading among Republicans is 19 per cent below the level just before the Iran conflict and the lowest since the 2024 election. Only 8 per cent of consumers expect their income to grow faster than inflation in the year ahead, down from 18 per cent in December 2024. Year-ahead inflation expectations edged up to 4.3 per cent from 4.2 per cent, while the long-run figure held at 3.3 per cent for a third month. Set beside Manila's soft quarter and Kuala Lumpur's unpersuasive 6 per cent, the early-August US reading is another case where an official or headline growth story does not settle household mood: Philippine policy is already less aggressive on rates because growth disappointed, Malaysian voters discounted a strong print, and American consumers marked confidence lower even as inflation expectations ticked only slightly higher.[3], [1], [2]
