November 30, 2024 | 12:00am
MANILA, Philippines — The National Economic and Development Authority (NEDA) expects the economy to grow faster in the fourth quarter compared to the previous quarter, bolstering optimism that the full-year economic growth can still be achieved.
In a press briefing yesterday, NEDA Secretary Arsenio Balisacan said the government remains upbeat about the fourth quarter economic performance.
“We remain optimistic that the fourth quarter will be better than the third. As you know, the third quarter [economic growth] was only 5.2 percent. We hope to be better than that and bring us at least to the low end of the growth target of six to seven percent for the year,” he said.
Philippine economic growth in the third quarter eased from the 6.4 percent growth in the second quarter and six percent expansion posted in the third quarter last year.
From January to September, the economy posted an average growth of 5.8 percent.
To achieve the six to seven percent growth target for the year, Balisacan said the economy needs to post at least 6.5 percent growth in the fourth quarter.
Should the economy expand by 5.9 percent to 6.1 percent for full-year 2024, he said it will still be considered a respectable growth for the Philippines compared to most emerging economies in the world.
The optimistic outlook on the country’s fourth quarter economic performance and for full-year 2024 is based on expectations of strong consumption spending during the holiday season.
“Holiday spending, more stable commodity prices and a robust remittance inflow and labor market give us confidence that our six to seven percent growth target is still achievable,” he said.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email yesterday he expects fourth quarter gross domestic product (GDP) growth to be at over 6.2 percent, faster than the third quarter.
“For the coming quarters, an easing inflation trend near the central bank target would support or justify future cuts in key policy rates or interest rates that would fundamentally lead to faster GDP or economic growth than otherwise,” he said.
For 2025, Balisacan said the economy is expected to benefit from the reduction in interest rates that were started earlier this year.
The Bangko Sentral ng Pilipinas (BSP) started its easing cycle in August by reducing the key interest rate by 25 basis points and delivering another 25-bp rate cut in October.
This brought the benchmark rate to six percent.
He said the effect of the decreased interest rates is typically felt “at least six months forward.”
“But even for durable consumer goods, we should already expect some of the benefits,” he said.
In terms of the inflation outlook for November, he said the figure is expected to be within the two to four percent target band.
Asked if he expects November headline inflation to breach three percent, he said it may only be marginal.
“We don’t see broad increases, substantial increases in prices. But we are monitoring and I think that our group, the Inter-Agency Committee on Inflation and Market Outlook, is looking at the situation and we are not seeing any major disruptions,” he said.
Headline inflation accelerated to 2.3 percent in October from 1.9 percent in September due to faster increases in food prices. This brought the average inflation in the January to October period to 3.3 percent, within the BSP’s two to four percent target range.
The Cabinet-level Development Budget Coordination Committee (DBCC), which approves macroeconomic targets, is set to meet next week to revisit growth goals in light of recent developments such as the global economic impact of Donald Trump’s re-election as US president and the peso’s depreciation against the dollar.
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