Philippine economic growth slows to 5.2% in storm-plagued Q3 2024
MANILA, Philippines – The Philippine economy grew by 5.2% in the third quarter of 2024, falling short of expectations, as it suffered from the effects of bad weather.
The Q3 2024 figure is lower than the 6% gross domestic product (GDP) growth in the third quarter of 2023, and the revised 6.4% GDP growth in the second quarter of 2024.
Services and industry contributed 4.1 and 1.3 percentage points to the 5.2% growth rate, respectively, while agriculture, forestry, and fishing contributed -0.2.
Services and industry moderately grew by 6.3% and 5% year-on-year, respectively, while agriculture, forestry, and fishing shrank by 2.8%.
“On the production side, the slowdown was due to a contraction in agriculture and a moderation of growth in industry and services,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said in a press conference on Thursday, November 7.
Under agriculture, forestry, and fishing, Balisacan said the crops subsector declined 2.8% year-on-year due to El Niño during the planting season as well as tropical cyclones and the southwest monsoon during the harvest season.
“Fishing and aquaculture also declined due to the 29-day fishing ban in Cavite and Bataan amid an oil spill incident last July and the cancellation of fishing trips due to bad weather conditions. Likewise, livestock production decreased due to the recent outbreaks of African swine fever, such as in Batangas last August,” the NEDA secretary added.
Storms had an impact on services and industry as well, causing “administrative delays and supply chain disruptions,” according to Balisacan.
On the demand side, National Statistician Dennis Mapa said household spending was the top contributor to GDP growth, as it grew by 5.1%. Government spending also grew by 5%.
Imports of goods and services went up by 6.4% year-on-year, but exports of goods and services declined by 1%. Balisacan attributed the decline in exports of goods to semiconductors (-17.9%), saying that the industry “is undergoing inventory corrections and has yet to meet the demands for new products in the global market.”
Growth target
Economists and analysts polled by BusinessWorld estimated the Q3 2024 figure would be 5.7%.
The average GDP growth for the first three quarters of 2024 is now at 5.8%, below the government’s full-year target of 6% to 7%.
Balisacan noted that the Philippine economy needs to grow by at least 6.5% in the fourth quarter to be able to meet the target for 2024.
“We remain optimistic that this growth target is attainable. We anticipate increases in holiday spending, more stable commodity prices given low inflation, lower interest rates, and a robust labor market,” he said.
For January to October, average inflation stood at 3.3%, within the government’s target range of 2% to 4%. The Bangko Sentral ng Pilipinas recently implemented another interest rate cut in October amid “manageable” price pressures.
Meanwhile, unemployment dropped for the second straight month to 3.7% in September, although underemployment rose to 11.9%.
Balisacan said the government is also focusing on recovery of storm-hit areas to spur economic activity, following tropical cyclones that caused billions of pesos worth of damage to agriculture and infrastructure.
So far, among Asian economies, only Vietnam (7.4%) has reported a higher Q3 2024 GDP figure than the Philippines. Indonesia (4.9%), China (4.6%), and Singapore (4.1%) posted lower growth rates. – Rappler.com