PH posts faster growth rate at 6.3% in Q2

The Philippine economy posted a faster growth rate in the second quarter of 2024 —marking its fastest footing in five quarters— on the back of strong consumption activities during the period, the Philippine Statistics Authority (PSA) reported on Thursday.

At a press conference, PSA chief and National Statistician Claire Dennis Mapa said the country’s gross domestic product (GDP) —the total value of goods and services produced in a period— grew by 6.3% in the April to June 2024 period.

This is faster than the upwardly revised GDP growth rate of 5.8% in the first quarter of the year.

This is also the Philippine economy’s quickest growth rate in five quarters since the 6.4% growth rate seen in the first quarter of 2023.

Significant Development

Among East Asian economies that have released second-quarter figures, the Philippines is behind Vietnam’s 6.9%, and above Malaysia’s 5.8%, Indonesia’s 5.0%, and China’s 4.7%.

“This significant development brings our real GDP growth to 6.0% for the first half of the year, keeping us on track to achieve our target growth of 6 to 7% for 2024,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said.

The PSA said contributors to the latest economic growth were construction with 16.0%; wholesale and retail trade; repair of motor vehicles and motorcycles with 5.8%; and financial and insurance activities with 8.2%.

In terms of major economic sectors, industry posted a 7.7% expansion and services with 6.8%, while the agriculture, forestry, and fishing sector declined by 2.3%.

Household spending was the major growth driver on the demand side, up 4.6%. Government spending increased by 10.7%, gross capital formation by 11.5%, exports of goods and services by 4.2%, and imports of goods and services by 5.2%.

The gross national income increased by 7.9%, while net primary income from the rest of the world rose by 24.7%.

“While these numbers are encouraging, our growth performance could have been even more impactful on all Filipinos if not for the high inflation and interest rates that the country experienced in the last two years,” Balisacan said.

“Considering the lagged effect of interest rate hikes that the Bangko Sentral ng Pilipinas carried out in response to the high inflation in 2022 and early 2023, we estimate that economic growth could have been over half a percentage point higher in 2023 if such rate hikes did not materialize,” he added.

The central bank raised key policy rates by 450 basis points since May 2022, in a bid to tame inflation which averaged 6.0% in 2023, higher than the target range of 2.0% to 4.0%.

“Amid evolving risks and challenges, the Philippines’ economic outlook remains promising in the near and medium term,” Balisacan said, with the government targeting a 6.0% to 7.0% growth for 2024, 6.5% to 7.5% for 2025, and from 6.5% to 8.0% for 2026 to 2028.

— with reports from Jon Viktor D. Cabuenas/ RSJ/ VAL, GMA Integrated News