THE country’s economy grew faster at 6.3 percent in the second quarter of 2024, the fastest acceleration since the first quarter of 2023, the Philippine Statistics Authority (PSA) reported on Thursday, Aug. 8, 2024.
The 6.3 percent gross domestic product (GDP) growth from April to June is higher than the 5.8 percent posted in the first quarter of 2024, bringing the GDP growth to six percent for the first half of the year, which is within the government’s target growth rate of six to seven percent for 2024.
The services sector has the highest contribution to the GDP with 4.2 percentage points, followed by the industry sector with 2.3 percent share.
The major economic sectors, industry, and services posted year-on-year solid growth in the second quarter, at 7.7 percent and 6.8 percent, respectively.
The agriculture sector experienced a year-on-year decline of 2.3 percent, which is attributed to the El Niño phenomenon.
On the demand side, the acceleration in GDP growth was driven by a significant increase in total investments by 11.5 percent due to the robust construction activities.
Construction posted a high growth of 16.1 percent boosted by both public and private construction activities.
Specifically, spending on public infrastructure projects posted a strong expansion of 21.8 percent due to the expedited roll-out of the Build Better More program. Public spending in construction activities helped in ushering in private sector construction, which grew by 9.9 percent.
Best performing economy
“This performance keeps our position as one of Asia’s best-performing major emerging economies,” said National Economic and Development Authority Secretary Arsenio Balisacan.
For East Asia’s economies that have released their second quarter GDP growth, the Philippines followed behind Vietnam at 6.9 percent while leading Malaysia at 5.8 percent, Indonesia at five percent and China at 4.7 percent.
Meanwhile, household consumption posted a growth of 4.6 percent year-on-year, as Filipinos spent more on miscellaneous goods and services. This is supported by a healthy job market with historically low unemployment rate and consistent inflows of remittances from overseas Filipinos.
Balisacan said that keeping food inflation and interest rates manageable is expected to spur both consumption and investment activity among households and businesses, strengthening the country’s economic growth prospects in the coming months and the medium term.
He said the administration will also continue to work to improve the purchasing power of Filipino families by creating more jobs and attracting more investments.
Optimistic
Business leaders in Cebu are confident of the country’s robust growth amid economic challenges, with a GDP growth potentially growing beyond the six percent rate, with inflation expected to go down and interest rates to be cut and loosened.
“The Philippines is on a sound economic path with manageable inflation and one of the highest growth rates in Asia,” said Steven Yu, entrepreneur and past president of the Mandaue Chamber of Commerce and Industry (MCCI).
MCCI president Mark Anthony Ynoc added that though the country aims to aggressively attract foreign direct investments, the business group hopes to see increased visibility of local businesses to also scale up in the global stage to sustain this growth momentum.
2025 budget
Finance Chief Ralph Recto said the proposed national budget of P6.35 trillion in 2025 is the government’s biggest tool to drive investments that will create more quality jobs for Filipinos, increase their incomes, reduce poverty incidence and grow the economy at an even faster rate.
The national budget is equivalent to 22.1 percent of the country’s 2025 projected GDP and is higher by 10.1 percent than the 2024 national budget of P5.77 trillion.
More than half of the 2025 national budget, or about 62.5 percent, will be allocated for both social and economic services, such as infrastructure, health, education, human capital development, social welfare, employment, housing, and other social protection programs./ KOC