The Filipino economy Extensive by a weaker than expected 5.2% in the fourth quarter, so that the growth of the entire year is brought under the objective of the government in the midst of moderate consumption and lower agricultural production.
Data from the Philippine Statistics Authority (PSA) showed that the gross domestic product (GDP) has expanded by 5.2% in the period from October to December, slower than the 5.5% print in the same period in 2023 and below the 5.8% median estimate in A Business world Poll.
This corresponded to the expansion of 5.2% in the third quarter, which was the slowest GDP since 4.3% in the second quarter of 2023.
The growth of the entire year amounted to 5.6%, which means that the revised target of 6-6.5% in short and the median estimate of 5.7% in a Business world Poll. The GDP print from 2024 was slightly faster than 5.5% in 2023.
“In 2024 we were confronted with numerous setbacks such as extreme weather conditions, geopolitical tensions and subdued global question, similar to the challenges we encountered in 2023,” National Economic and Development Authority (Neda) Onderstaars for policy and planning group Rosemarie G. Edillon said. “This suggests that these conditions can normally represent the new.”
On a seasonal adapted quarterly base, GDP achieved the growth of 1.8% in the fourth quarter of 1.5% in the previous quarter.
Among Asian countries that have released their data, Mrs. Edillon said that the Philippines had the third fastest GDP growth in the fourth quarter, behind Vietnam (7.5%) and China (5.4%), and for Malaysia (4, 8%).
“Although this is under our goal, we remain one of the fastest growing economies in both the region and the world. This despite external and local challenges such as extreme weather conditions, geopolitical tensions and modest global question, ”said financial secretary Ralph G. Recto in a separate statement.
Mrs Edillon attributed the slower growth to the impact of a series of typhoons on the agricultural sector in the last months of 2024.
Agriculture, forestry and fishing (AFF) Kromp in the period of October-December by 1.8% and improves a year ago of the contraction of 2.7%.
In 2024, agriculture fell by 1.6%, a reversal of the growth of 1.2% in 2023.
“The agricultural sector has had to deal with considerable setbacks due to typhones, droughts and other climate -related disruptions,” said Mrs. Edillon.
Individual PSA data showed that agricultural production was contracted with a record of 2.2% to P1.73 trillion in 2024, brought by El Niño and then followed by La Niña. The decline of Farm Output last year was the worst in almost three decades (26 years) or since the 7% contraction in 1998.
“The AFF sector, which contributes about 8% to GDP and offers living for about a fourth of the workforce, was confronted with disruptions of the production of crops, cattle and fishing, which further worsens the vulnerabilities,” said Mrs. Edillon.
At the same time, the sector sector grew by 4.4% in the fourth quarter and delayed from 5.1% a year ago. For 2024, the industry expanded by 5.6%, with an improvement of 3.6% in 2023.
Construction and production were the most important contributors to the growth of the industry. The construction growth delayed up to 7.8% in the fourth quarter of 9% in the same period a year ago, which resulted in the growth of the entire year at 10.3%.
“The production only grew by 3.1%. These achievements are impeded by a modest worldwide question due to geopolitical tensions and the slow recovery of advanced economies, “said Mrs. Edillon.
“There are industries such as semiconductors who still have to update their product offering to meet the changing demand.”
The service sector, which was good for 62% of the total GDP, expanded by 6.7% in the period from October to December, and delayed from 7.4% in the same period in 2023. For the entire year the growth of the services at 6.7%.
Crazier consumption
In the meantime, the expenditure for the final consumption of households, which accounts for more than 70% of the economy, with 4.7% in the fourth quarter, grew delayed from 5.2% in the third quarter and 5.3% in the same quarter in 2023.
For the entire year, domestic consumption rose by 4.8%, delayed from 5.6% in 2023. Private consumption is good for about three -quarters of the economy.
Mrs Edillon said that household consumption was influenced by the series of typhoons that met the country in the fourth quarter.
“This has tempered the growth momentum … Although we did see that there were increased expenses for travel, transport and recreation and culture. But it wasn’t enough to prevent the delay in the other editions, “she said.
Mrs Edillon said that high prices of food, in particular vegetables, also weighed consumption in the fourth quarter.
“We hope this is very temporary … We hope that the situation will stabilize soon,” she added.
Miguel Chanco, Chief of emerging Asia -economist in Pantheon Macro -economy, said that the latest GDP data demonstrates a renewed deterioration of household consumption.
“This (4.7% increase in consumption in the fourth quarter) marks a return to the 10-year lows that are seen in the first half of last year, if we exclude the different COVID-19 years, with the full annual exit of 4.8% that represents the slowest growth since 2010, “Mr. Chanco said in a report.
“We want to repeat that private consumption is probably moderate, although inflation is normalized and the interest rates are now falling, because the household balance sheets are still weak, plagued by low savings and high debts,” he added.
GOV’t expenditure
PSA data also showed that the final consumption spending of the government (GFCE) increased by an annual 9.7% in the period from October to December, a change of the fall of 1% in the same period in 2023.
In 2024, government spending grew by 7.2%, faster than 0.6% seen in 2023.
“We are quite happy with this performance of GFCE … that specific expenditure growth is actually quite respectable and in fact supportive for the entire economy,” said Mrs. Edillon.
In a separate interview, Mrs. Edillon said that seven flagship projects of Infrastructure (IFPs) were completed last year and that there are still 13 on schedule to complete this year.
Gross capital formation, the investment component of the economy, grew by 4.1% in the fourth quarter, greatly delayed from 11.6% in the same quarter in 2023.
For the full year, gross capital formation spread by 7.5%, faster than 5.9% a year ago.
Mrs Edillon said that the investments are generally in order, because there is still a huge backlog of infrastructure projects that “will bridge us until we enter all these large investments”.
“With regard to foreign investments you still have geopolitical tensions. This is a big problem, but we hope they are very temporary, “she added.
In the meantime, the export of goods and services grew by 3.2% in the fourth quarter and bounced back from the contraction of 2.5% in the same period a year ago, driven by an increase in services of 13.5%. The export of goods fell by 4.6%.
For 2024, the export of goods and services has expanded by 3.4%, faster than the growth of 1.4% in the previous year.
Input rose by 3.2% in the fourth quarter, faster than the 2% in the previous year.
For the full year, import expanded by 4.3%, faster than the growth of 1% in 2023.
Prospect
In the meantime, Mrs. Edillon of Neda said that the government is sure that he is at least the lower end of the 6-8% target for 2025, because government agencies are instructed to “think continuity and maximum impact”.
“Looking ahead to 2025, we want to regain our growing momentum that is powered by strategic investments and initiatives designed to strengthen the resilience and lay the foundation for long -term, inclusive growth,” she added.
Mr. Recto said that this year the government will remain optimistic about the economic prospects.
“Lower inflation gives us more room to illuminate the interest rates, which will further increase consumption,” he added.
Senior Asia -economist Gareth Leather from Capital Economics said he expected the Filipino economy to grow by 6% this year.
“Strong and steady growth supports our opinion that the relaxation cycle will gradually remain in the coming months,” Mr Leather said in a report.
The Bangko Sentral NG Pilipinas started his Rate-Cut cycle last year and yielded a total of 75 BPS of Reductions.
“An important uncertainty in the coming year is whether and to what extent Donald Trump goes through with his threats to impose rates and to clamp immigration. The Philippines are less vulnerable than other parts of the region for rates. However, Trump’s deportation plans can influence the transmissions of the US to the Philippines, which are equivalent to about 3.5% of GDP of the country, “said Mr Leather. – Ara inosante