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