Philippine GDP growth accelerates in Q2 2024, boosting economic outlook

By Francis Allan L. Angelo

The Philippine economy sustained its strong growth trajectory in the second quarter of 2024, with gross domestic product (GDP) expanding by 6.3%, surpassing the revised 5.8% growth rate recorded in the first quarter.

This puts the country on track to meet its target GDP growth of 6% to 7% for the year, according to National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan.

“Today, we are pleased to announce that the Philippine economy has sustained its robust growth trajectory, demonstrating resilience amid various domestic and external challenges,” Balisacan stated during a press briefing on August 8, 2024.

The robust economic performance in the first half of the year, which saw a cumulative growth of 6.0%, positions the Philippines as one of Asia’s best-performing major emerging economies. The country’s growth rate follows Vietnam’s 6.9% and outpaces Malaysia’s 5.8%, Indonesia’s 5.0%, and China’s 4.7%.

Industry and services sectors led the growth, posting year-on-year increases of 7.7% and 6.8%, respectively. However, the agriculture sector faced a setback, declining by 2.3% due to the adverse effects of the El Niño phenomenon.

On the demand side, the GDP growth was driven by a significant 11.5% increase in total investments, particularly in construction activities.

Public construction surged by 21.8%, bolstered by the government’s accelerated infrastructure projects under the Marcos administration. Private construction also saw strong growth, with commercial construction leading the way.

The country’s employment landscape also improved, with the unemployment rate hitting a record low of 3.1% in June 2024.

This is the lowest rate recorded in almost two decades, as the number of employed persons exceeded 50 million. Additionally, underemployment continued to decline, reflecting better job quality.

Poverty reduction efforts also showed significant progress. The 2023 Official Poverty Statistics Report revealed that poverty incidence dropped from 18.1% in 2021 to 15.5% in 2023, lifting 2.45 million Filipinos out of poverty.

Food poverty also declined, with 1.71 million fewer individuals classified as food-poor.

Despite the positive economic indicators, Balisacan acknowledged that high inflation and interest rates in the past two years had tempered potential growth.

He noted that economic growth in 2023 could have been over half a percentage point higher without the impact of rate hikes by the Bangko Sentral ng Pilipinas (BSP).

Moreover, poverty reduction could have been more significant if inflation had been kept within target levels.

Looking ahead, the government remains focused on sustaining economic momentum. President Ferdinand Marcos Jr. has emphasized food security and managing food inflation as top priorities.

The administration also plans to accelerate social protection programs, including enhancements to the Food Stamp Program and the 4Ps Program, as well as the rollout of the National ID system.

The government is also committed to improving agricultural productivity, boosting investment in infrastructure, and advancing digitalization efforts to enhance economic resilience.

The recently developed Trabaho Para sa Bayan (TPB) Plan aims to address employment challenges and align educational outcomes with market demands, ensuring that more Filipinos benefit from the country’s economic growth.

“Our goal is to drive substantial investments in both physical and human capital to generate more and better jobs, enhance the competitiveness of our economy, and, most importantly, reduce poverty to single-digit levels by 2028,” Balisacan said.

Despite ongoing challenges, the Philippine economic outlook remains promising, with the country poised to achieve its growth targets and move closer to realizing a comfortable and secure life for all Filipinos.