PH misses growth target for second year

Metro Manila, Philippines - The impact of back-to-back typhoons in the last quarter stunted the full-year economic growth in 2024, according to government data released on Thursday, Jan. 30.

The Philippine economy expanded by 5.6%, falling short of the government target of at least 6%.

This was the second straight year that the Marcos administration missed its target. Growth in 2023 was at 5.5%.

Economic expansion, as measured by the gross domestic product (GDP) grew by 5.2% in the last quarter.

In a press briefing, the National Economic and Development Authority (NEDA) said while the goal was missed, the Philippines remains as one of the fastest growing economies in the region.

“We are positioned as the third fastest growing economy in the region, trailing Vietnam at 7.5%, China at 5.4% but outpacing Malaysia at 4.8%,” said NEDA Undersecretary Rosemarie Edillon.

NEDA said a number of factors contributed to setbacks, particularly in the agriculture sector that suffered from successive typhoons.

“These extreme weather conditions led to a 1.8% year-on-year contraction in the agriculture, forestry, and fishery sector in the fourth quarter of 2024. The AFF (agriculture, forestry, fisheries) sector, which contributes around 8% in GDP and provides livelihood to about one fourth of the workforce, faced disruptions in crop production, livestock, and fisheries further compounding its vulnerabilities,” Edillon said.

The PSA said the AFF sector posted a contraction of 1.6 percent in 2024.

Meanwhile, the agency said industry and services sectors contributed to the economic growth, posting 5.6 and 6.7% respectively.

Data showed that the wholesale and retail trade, repair of motor vehicles and motorcycles, financial and insurance activities, and construction were among the top industries that contributed to the growth.

“We need to diversify our source of growth, encourage more investments in sectors that require workers with higher level skills and further develop an agile workforce,” Edillon said.

“Looking ahead to 2025, we want to regain our growth momentum driven by strategic investments designed to strengthen resilience and lay the foundations for long term inclusive growth,” she added.

Edillion said infrastructure projects remain a crucial growth driver, noting that 11 flagship programs are expected to be completed this year.

The NEDA official also pointed to boosting tourism and regional trade agreements to improve the economy.

“We will maximize the opportunities with long-standing partners while expanding new free trade agreements. We must, for instance, leverage and maximize the newly ratified Philippine South Korea FTA (free trade agreement) and increase investments in post-harvest facilities for bananas and other tropical fruits,” she added.