The Philippine economy likely sustained its strong growth in the second quarter of 2024, as the economic managers maintained their 2024 growth target of 6 percent to 7 percent.
“We will release the second-quarter growth performance later this week. We expect the economy to have remained strong and maintain our regional growth standing,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said at the House of Representatives Monday.
The country’s gross domestic product (GDP) expanded by 5.7 percent in the first quarter of 2024, coming from a high base of 6.4 percent growth in the first quarter of 2023 and picking up from 5.5 percent in the fourth quarter 2023.
Balisacan said that among major emerging economies in the region, the Philippines posted one of the fastest growths in the first quarter, next to India (7.8 percent), equal to Vietnam (5.7 percent), but ahead of China (5.3 percent), Indonesia (5.1 percent), Malaysia (3.9 percent) and Thailand (1.3 percent).
He said that based on the latest data, the Philippines is expected to pass the upper-middle-income (UMIC) threshold by 2025, provided that the economy achieves the low end of the growth target and the average foreign exchange does not exceed P58 against the US dollar. “Otherwise, reaching the UMIC status could be delayed to 2026,” said Balisacan.
Balisacan said the Development Budget Coordination Committee (DBCC), in a meeting on June 27, 2024, maintained the economic growth targets at 6.0 percent to 7.0 percent in 2024, 6.5 percent to 7.5 in 2025 and 6.5 to 8.0 percent in 2026 to 2028.
“Easing inflation, sustained improvements in labor market conditions and stable remittance growth will support household spending. The government will also continue implementing measures to address the elevated prices of rice and select food items and ensure food security to protect Filipinos’ purchasing power,” he said.
Balisacan said despite the fiscal consolidation strategy, government spending would support growth by improving efficiency in delivering priority programs and projects. The Marcos administration will ensure the timely implementation of the programs and projects under the 2024 and 2025 national budgets, he said.
“We also hope for the timely passage of the FY 2025 National Budget. In addition, the full implementation of the New Government Procurement Act will improve efficiency in government procurement, ensure value for money, and enhance the quality of public services,” he said.
Balisacan said capital formation is expected to expand in 2024, supported by robust construction activities through the government’s “Build-Better-More program” and the “Pambansang Pabahay Para sa Pilipino” (4PH), the government’s national housing program.
“Implementing the PPP Code of the Philippines is also expected to strengthen and facilitate greater private-sector participation in the country’s infrastructure development,” he said.
The NEDA chief said the government would continue to implement pro-investment reforms fully and further improve the ease of doing business to encourage business expansion and new investments in emerging and priority areas.
He said that on the external front, the country would continue to forge strategic foreign trade agreements (FTAs) with other markets. The Philippines is looking to advance bilateral FTAs with the European Union (EU), the United Arab Emirates (UAE) and India.
Balisacan said the country should also take advantage of the US CHIPS Act, which would assist in improving the country’s product assembly, testing and packaging.
“To boost growth next year, the Marcos administration will continue to implement the strategies we have set in the Philippine Development Plan, guided by the lessons we have identified in the Philippine Development Report 2023,” he said.
“The government will focus on promoting social development and transformation. We recognize the importance of addressing learning losses and will implement programs to boost health, establish livable communities and strengthen social protection, supporting educators in their crucial role,” he said.
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