The National Economic and Development Authority (NEDA) expects faster gross domestic product (GDP) growth in the fourth quarter of 2024 compared to the 5.2 percent in the third quarter.
Balisacan said the growth would be driven by domestic spending, stable inflation, sustained remittance inflows and strong job market.
“We remain optimistic about the fourth-quarter economic performance. Holiday spending, more stable commodity prices, and a robust remittance inflow and labor market give us confidence that our 6.0 to 7.0 percent growth target is still achievable,” he said.
He said the economy showed remarkable resilience, with GDP growing by an average of 5.8 percent in the first three quarters of 2024.
“We experienced significant weather-related disturbances or disruptions throughout the year: a prolonged dry season due to El Niño and the consecutive strong typhoons amid La Niña. Increasingly volatile climate patterns have affected our growth and adversely impacted agriculture, the movement of goods, and overall economic activity in affected areas,” he said.
“Notwithstanding these disruptions, our growth rate still positions us as one of the fastest-growing economies in Asia. It is a testament to our people’s hard work and dedication and the sound policies implemented by our government despite such challenging conditions,” he said.
He said the government effectively managed inflation, averaging 3.3 percent from January to October 2024, or comfortably within the government’s target range of 2.0 to 4.0 percent for the year.
“Through the Government’s vigilant measures to stabilize prices amid external pressures, we were able to keep inflation within our target band,” he said.
Balisacan said critical interventions included a comprehensive tariff review of agricultural commodities to maintain stable prices.
He also noted the robust labor market which is a vital pillar supporting growth. Based on the September labor force survey, the total labor force participation rate increased to 65.7 percent from 64.0 percent in the same period last year, he said.
The unemployment rate decreased to 3.7 percent from 4.5 percent in September 2023, but the underemployment rate rose to 11.9 percent in September 2024 from 10.7 percent a year ago.
“Still, the trend has been broadly downward, as we have seen over the last few years. We focus on improving our employment prospects through aggressive investment-promotion efforts and the accelerated rollout of supporting infrastructure,” he said.
Balisacan said the government targets to reduce the budget deficit to 5.6 percent of GDP, with the figure settling at 5.1 percent of GDP in the first nine months, narrower than the 5.7 percent recorded in the same period last year.
He noted that S&P Global Ratings recently upgraded its outlook on the Philippines to positive from stable, reflecting the economy’s above- average growth potential and the significant improvements in the country’s institutional and policy settings, driven by ongoing fiscal reforms, infrastructure development, and enhanced investment conditions.
Balisacan said the Philippines is also on track to achieving upper middle-income economy (UMIC) status by 2025, with its gross national income (GNI) capita exceeding the threshold of $4,500 set by the World Bank.
“We have a good chance of attaining upper middle-income country (UMIC) status in 2025. Attaining this status will require that we achieve our growth target this year, that we maintain our growth trajectory in 2025, and our currency will not weaken significantly relative to the currencies of our major trading partners,” he said.
He said that with inflation expected to stay comfortably within the target range, the Bangko Sentral ng Pilipinas’ carefully and deliberately eased its monetary policy settings, resulting in improved consumer and business sentiment.
“We expect the BSP’s decision to cut policy rates by a cumulative 50 basis points and reduce reserve requirements to boost liquidity to spur growth in private spending, particularly on big-ticket consumer items and investments in capital-intensive infrastructure in the coming quarters, which we see as another significant economic growth driver. This move will support economic growth by making borrowing more affordable for businesses and consumers,” he said.
Balisacan said the goal of reducing nationwide poverty to a single-digit rate by 2028 remains achievable.
“Despite high inflation, we have already made remarkable strides, with poverty falling to 15.5 percent in 2023 from 18.1 percent in 2021. Maintaining low and stable prices is critical to reducing poverty and making economic growth more inclusive. We will continue to enhance our social protection programs, particularly through digital solutions enabled by the National ID, to protect our gains and ensure that no one is left behind,” he said.
