The Philippine economy continued its growth trajectory in the final quarter of 2024, but the full-year expansion fell short of the government’s target, the Philippine Statistics Authority (PSA) reported Thursday.
Gross domestic product (GDP) grew by 5.2% in the fourth quarter, unchanged from the previous quarter but slower than the 5.5% recorded in the same period of 2023. This brought full-year economic growth to 5.6%, slightly exceeding the 5.5% in 2023 but missing the government’s revised 6.0% to 6.5% target.
This marks the second consecutive year the country has failed to meet its economic target, following a 5.5% expansion in 2023—below the 6.0% to 7.0% goal for that year. In contrast, growth in 2022 reached 7.6%, surpassing expectations.
Despite missing the target, the Philippines remained one of the fastest-growing economies in the region, ranking third behind Vietnam (7.5%) and China (5.4%), while outpacing Malaysia (4.8%).
Challenges and Sectoral Performance
The National Economic and Development Authority (NEDA) attributed the slower growth to external challenges, including extreme weather events, geopolitical tensions, and subdued global demand.
“In 2024, we faced numerous setbacks, similar to those in 2023. These conditions may represent the new normal,” said NEDA Undersecretary Rosemarie Edillon during a press briefing.
Among the major economic sectors:
Services expanded 6.7%, continuing to drive overall growth.
Industry grew 5.6%, while manufacturing posted a modest 3.1% increase, weighed down by weak global demand.
Agriculture, forestry, and fishing contracted 1.6%, with the agriculture sector alone declining 2.2%, below the Department of Agriculture’s 1.0% to 2.0% target.
Edillon cited the six typhoons that hit the country between October and November as a key factor in the agriculture sector’s struggles.
Key Growth Drivers and Spending Trends
Industries that contributed the most to annual growth included:
Wholesale and retail trade, and repair of motor vehicles/motorcycles (+5.6%)
Financial and insurance activities (+9.0%)
Construction (+10.3%)
Household consumption rose 4.8%, while government spending increased 7.2%. Exports and imports grew by 3.4% and 4.3%, respectively. Meanwhile, gross national income was recorded at 7.6%, with net primary income reaching 26.1%.
Policy Outlook and Future Prospects
Despite falling short of the target, NEDA Secretary Arsenio Balisacan described the Philippines’ economic performance as “impressive,” given the external headwinds. Moving forward, policymakers are hopeful that the latest growth data could give the Bangko Sentral ng Pilipinas (BSP) room to adjust interest rates to support expansion.
In 2024, the Monetary Board cut policy rates three times—in August, October, and December, totaling a 75-basis-point reduction. Edillon emphasized the need for policies that diversify economic growth sources, encourage investment in high-skilled industries, and stabilize food inflation through proactive measures.
“As we navigate these uncertainties, ensuring resilient and inclusive growth remains a priority,” she added.