29 Nov NEDA says 2024 growth target ‘still achievable’
The Philippines can still achieve its 6-7% gross domestic product (GDP) growth target this year, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said on Friday.
“We remain optimistic about the fourth quarter economic performance. Holiday spending, more stable commodity prices, robust remittance inflow, and labor market give us confidence that our 6 to 7% growth target is still achievable,” he said during a press conference on Friday.
Mr. Balisacan said fourth quarter GDP growth will likely be faster than the third quarter, amid easing inflation and lower interest rates.
“I think all these, we believe that the fourth quarter could be better than the third quarter,” he said.
Mr. Balisacan said these “positive forces” could outweigh the expected contraction in agricultural output due to weather disturbances.
In the third quarter, GDP expanded by 5.2%, as bad weather hurt agricultural output and slowed government spending. This was slower than the revised 6.4% in the second quarter and and 6% a year ago.
It was also the weakest growth in five quarters or since the 4.3% expansion in the second quarter of 2023.
For the first nine months, GDP growth averaged 5.8%. The economy has to grow by 6.5% in the fourth quarter in order to reach the lower end of the government’s 6-7% target for 2024.
Mr. Balisacan said that even if Philippine GDP expands by an average of 5.9% to 6.1% for the full year, this would still be a “very respectable growth” compared to most emerging economies.
For 2025, Mr. Balisacan said the economy will likely benefit from rate cuts by the Bangko Sentral ng Pilipinas’ (BSP).
Since starting its easing cycle in August, the BSP has cut borrowing costs by 50 basis points, bringing the benchmark rate to 6%.
TRUMP IMPACT
Meanwhile, Mr. Balisacan said the Philippines is “ready to work with any economy” as Donald J. Trump is set to assume the presidency in the United States in January.
He said the Philippines will adjust its policies accordingly as it continuously built “solid” relationships with the US and other countries.
Mr. Trump has proposed to impose 60% tariffs on US imports of Chinese goods, as well as a universal tariff of up to 20%.
“The best hope we could make is that what was stated during the campaign would be different from what will actually happen. So that we won’t get into these high tariffs, increasing tariffs,” he said.
It would be “bad” for the global economy as a whole as it could reduce trade, inflows, and more, Mr. Balisacan said.
“We expect that we hope that we won’t go there, but still our priority, even before this development and as reflected in our PDP [Philippine Development Plan], is to diversify the economy so that we have all these growth pillars kicking in,” he said. — Aubrey Rose A. Inosante