Farm sector slump slows down Q3 economic growth

Metro Manila, Philippines — A contraction in farm output that suffered from back-to-back calamities dragged economic expansion in the third quarter, according to latest official data released on Thursday, Nov. 7.

The Philippine Statistics Authority (PSA) said the economy grew 5.2% year-on-year in the July-September period, slowing down from 6.4% in the second quarter, and from last year’s 6%.

The PSA on Thursday, Nov. 7, said agriculture, forestry, and fishing contracted by 2.8% in the third quarter.

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Socioeconomic Planning Secretary Arsenio Balisacan said this reflected “the impacts of El Niño during the planting season and the effects of seven typhoons in addition to the habagat season during the harvest season.”

He said agriculture suffered P15.8 billion in damage from seven tropical cyclones, including Typhoon Kristine in October.

The Philippines is vulnerable to extreme weather, in particular more frequent and stronger storms. State meteorologists said six more tropical cyclones may enter the weather disturbance monitoring area before year-end.

The industry and services sectors, meanwhile, moderately expanded by 5% and 6.3%, respectively, due to “successive typhoons [that] suspended classes and work in government and some private offices, resulting in administrative delays and supply chain disruptions,” Balisacan said.

Tourism slowed down as well in the third quarter that offset higher household spending with the lower rate of price increase in goods and services. Bad weather also held up public construction and export of services.

Balisacan said the third quarter output brought the average growth rate to 5.8%, short of the government’s full-year target of 6% to 7%.

“The economy needs to grow by at least 6.5% to meet the government's target for the last quarter of 2024,” he said. “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,” Balisacan said, adding that recovery efforts in typhoon-hit areas will drive economic activity.

The Bangko Sentral ng Pilipinas has cut borrowing cost by 50 basis points amid slower inflation.

Balisacan said the government would push to sustain infrastructure drive by intensifying efforts in ease of doing business and elevating competitiveness to boost investors’ interest and confidence.

Other measures included engaging in free trade deals and strengthening tourism infrastructure.