The Philippine economy slowed down to 5.2 percent in the third quarter of 2024 but remains one of the fastest-growing economies in Asia, according to Economic Planning chief Arsenio Balisacan.
“Our economy continues to grow steadily; the latest GDP figures indicate continuous expansion. Of the countries that have reported their third-quarter GDP growth rates, we remain one of the fastest-growing Asian economies,” he said in yesterday press briefing.
The Philippine Statistics Authority (PSA) reported that the economy, as measured by gross domestic product (GDP) grew by 5.2 percent in the third quarter, weaker than the revised 6.4 percent growth in the previous quarter.
This brought the average GDP growth for the first three quarters of 2024 to 5.8 percent, slightly below our target of 6 to 7 percent for the year.
“We follow Vietnam, which posted a 7.4 percent growth rate, and are ahead of Indonesia (with 4.9 percent), China (4.6 percent), and Singapore (4.1 percent),” Balisacan added.
Despite the weak economic growth in the third quarter, the government remains optimistic that its 6 percent to 7 percent growth target is “attainable”, he said.
“The economy needs to grow by at least 6.5 percent to meet the government’s target for the last quarter 2024,” the NEDA chief said.
“We anticipate increases in holiday spending, more stable commodity prices (given low inflation), lower interest rates, and a robust labor market. In the areas affected by typhoons, recovery efforts will drive economic activity and, hopefully, build back better,” Balisacan said.
Finance Secretary Ralph G. Recto, meanwhile, underscored that the Philippines’ strong economic momentum is in place and that the country must do everything to take advantage of it.
“The Philippine economy has already doubled its size since 2013 in terms of nominal GDP. And by 2030, our projections show that we can grow by another two-fold,” Recto said in his keynote address at the Stratbase Pilipinas Conference.
Stratbase ADR Institute for Strategic and International Studies (ADRi) is an independent, international research organization focused on the in-depth analysis of economic, social, political, and strategic issues influencing the Philippines and the Indo-Pacific region.
From being the world’s 34th largest economy in 2023, the International Monetary Fund (IMF) projects that the Philippines will climb to the 28th spot by 2029, while Goldman Sachs expects the country to become the world’s 14th largest economy by 2075.
Moreover, an HSBC study revealed that the Philippines’ has the most favorable demographics in ASEAN. The country’s share of the working-age population is projected to grow by as much as 15 percent from 2025 to 2035, the fastest in the region.
The country’s demographic dividend is expected to boost its GDP per capita, not only driving up demand for consumer goods but also boosting investments, as households gain the ability to allocate more funds toward savings and investment.
“This golden moment is one we are committed to taking full advantage of to strengthen our already dynamic labor force,” Secretary Recto stressed.
“It is only then right that we take it as our collective duty as a nation to invest in the skills and education of our young population to fully capitalize on this demographic dividend,” he added.
With this, Recto underscored the critical role of the private sector in shaping the country’s future as a catalyst for growth.
“[W]e recognize that the private sector’s role is indispensable in this quest. For you are our major economic lifeline. You have the power to accelerate or break our growth momentum,” he said.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. said that the increased infrastructure spending would also contribute to economic growth in view of election-related spending in preparation for the May 2025 elections.
“Thus, the latest slowdown in GDP growth data could still support/warrant/justify further local rate cuts for the coming months/quarters, especially if inflation stays within the BSP’s target range of 2 percent to -4 percent ,” he added.
Ricafort also said that the Philippines has been and would still be among the fastest growing economies in ASEAN/Asia, with a GDP growth of about 6 percent to 7 percent amid the country’s favorable demographics or demographic sweet spot/demographic dividend since 2015.
“Philippine GDP growth estimate could normalize to around 5.5 percent to 6.5 percent in 2024 and beyond (next 5-10 years amid the country’s favorable demographics/demographic sweet spot/demographic dividend or majority of the population of more than 113 million already at working age since 2015),” he added.
