The Philippine economy grew by 5.2% in the third quarter of 2024, driven by strong private spending, according to Finance Secretary Ralph G. Recto.
This growth positions the Philippines ahead of regional peers, surpassing Indonesia’s 5.0%, China’s 4.6%, and Singapore’s 4.1% for the same period.
For the first three quarters of 2024, the country’s economic expansion also exceeded Indonesia’s 5.0%, China’s 4.9%, and Singapore’s 3.3%.
“Household spending is particularly a bright spot growing by 5.1%, faster than the last two quarters due to slower inflation,” Recto said.
He noted that recent policy rate cuts and a reduction in the reserve requirement ratio could inject more liquidity into the economy and enhance purchasing power.
“As interest rates come down, private construction will rebound due to lower cost of housing loans,” Recto added.
He expects spending on non-essential items to rise as the holiday season approaches, supported by stable prices and a strong labor market.
The industry and services sectors grew by 5.0% and 6.3%, respectively, although at a slower pace than the previous year due to base effects.
Sub-sectors showing the highest growth included construction, accommodation and food service activities, and human health and social work.
The agriculture sector, however, contracted by 2.8% due to the effects of El Niño, La Niña, and recent typhoons.
“The government has been responsive in providing much-needed support for our farmers, fishermen, and the rest of the agriculture workers to improve their productivity,” Recto said.
He also highlighted the government’s efforts to quickly deliver aid to typhoon-affected areas to facilitate faster recovery.
Domestic demand remained robust with a growth of 6.6%, driven by accelerated household spending.
Total investments grew by 13.1%, supported by improved construction activities, with private construction rising by 11.9% from 10.3% in the previous quarter.
The government is pushing for the passage of the PHP 6.35-trillion national budget for 2025 to spur growth.
The proposed budget is 10.1% higher than the 2024 budget and represents 22.1% of the projected 2025 GDP.
About 62.5% of the 2025 budget will go to social and economic services, including infrastructure, health, education, social welfare, and housing.
The government is focusing on preparing the economy and the labor force for an AI-driven future to sustain growth in the services and industry sectors.
Climate mitigation and disaster response efforts will be strengthened to improve resilience.
The Department of Finance (DOF) will continue to empower local government units through the People’s Survival Fund and increase micro-insurance coverage for vulnerable communities.
The Department of Agriculture (DA) plans to accelerate its African swine fever vaccination program and enhance agricultural productivity.
The Rice Competitiveness Enhancement Fund (RCEF) will be extended until 2031, increasing its budget from PHP 10 billion to PHP 30 billion to support rice farmers.
The DOF aims to monitor and mitigate price increases to keep inflation within the target range.
Public spending on infrastructure will continue, targeting 5% to 6% of GDP annually due to its high multiplier effect.
The Public-Private Partnership (PPP) Code is expected to attract more private investment, particularly in power generation and transmission.
The government anticipates increased private investments with the approval of the CREATE MORE bill, which is expected to pass within the year.
