The Philippines can still accomplish its 6-7% gross domestic product (GDP) growth aim this year, stated National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan on Friday.
“We continue to be hopeful about the economic performance in the fourth quarter. Holiday expenditures, more stable prices of commodities, strong remittance flows, and a favorable labor market provide us with the assurance that our 6 to 7% growth target remains attainable,” he remarked during a press briefing on Friday.
Mr. Balisacan indicated that the GDP growth for the fourth quarter is likely to surpass that of the third quarter, in light of softening inflation and reduced interest rates.
“I believe that all these factors suggest that the fourth quarter may perform better than the third quarter,” he stated.
Mr. Balisacan noted that these “favorable factors” may counterbalance the anticipated decline in agricultural production due to weather disruptions.
In the third quarter, GDP rose by 5.2%, as adverse weather affected agricultural yields and hindered government spending. This was below the revised 6.4% in the second quarter and 6% a year ago.
This also marked the slowest growth in five quarters, since the 4.3% increase in the second quarter of 2023.
For the initial nine months, GDP growth averaged 5.8%. The economy must increase by 6.5% in the fourth quarter to meet the lower threshold of the government’s 6-7% goal for 2024.
Mr. Balisacan stated that even if Philippine GDP registers an average of 5.9% to 6.1% for the entire year, this would still represent a “very commendable growth” in comparison to many emerging markets.
Looking ahead to 2025, Mr. Balisacan expressed that the economy will likely benefit from interest rate reductions made by the Bangko Sentral ng Pilipinas (BSP).
Since initiating its easing strategy in August, the BSP has lowered borrowing costs by 50 basis points, setting the benchmark rate at 6%.
TRUMP IMPACT
In addition, Mr. Balisacan remarked that the Philippines is “prepared to collaborate with any economy” as Donald J. Trump is poised to take office as president in the United States in January.
He mentioned that the Philippines will adapt its policies as necessary while continuing to develop “strong” ties with the US and other nations.
Mr. Trump has suggested implementing 60% tariffs on US imports of Chinese goods, along with a universal tariff of up to 20%.
“Our greatest hope is that what was communicated during the campaign differs from what ultimately occurs. So that we may avoid these high tariffs and escalating duties,” he stated.
It would be “negative” for the global economy overall, as it could hinder trade, inflows, and more, Mr. Balisacan noted.
“We hope that we won’t reach that point, but still our focus, even prior to this situation and as outlined in our PDP [Philippine Development Plan], is to diversify the economy so that all these growth drivers are activated,” he concluded. — Aubrey Rose A. Inosante