PH economic growth in Q4 seen 'better than Q3' —NEDA's Balisacan

The Philippines’ economic performance in the last quarter of 2024 is expected to be faster than in the third quarter despite the series of cyclones that hit the country amid robust macroeconomic fundamentals seen during the period, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said Friday.

“We remain optimistic about the fourth quarter economic performance,” Balisacan said at the NEDA year-end press conference in Mandaluyong City.

With this, the country’s chief economist said that the anticipated growth in the last three months of the year “gives us confidence that our 6% to 7% growth target is still achievable.”

As of the first three quarters of 2024, the economy as measured by gross domestic product (GDP) — the total value of goods and services produced in a period — grew by 5.8%, slightly below the government’s target band.

Balisacan cited “holiday spending, more stable commodity prices, and a robust remittance inflow and labor market” as the positive factors that would paint a rosier economic picture in the last quarter of the year.

However, the NEDA chief said that weather-related disasters, especially the consecutive cyclones that hit the country, would result in a negative growth for the agriculture sector.

“As you know, agriculture is still a very important part of the economy. Almost 10% of the economy is still agriculture,” Balisacan said.

Nevertheless, he said that the “positive forces could outweigh those developments in the agriculture sector.”

“I mentioned earlier declining interest rates, inflation coming down to the target range and prices likely to remain stable, the continuing robust labor market, and remittances continuing to be strong… so I think all these make me believe that the fourth quarter [GDP] would be better than the third quarter,” Balisacan said.

The NEDA chief said that inflation stood at 3.3% from January to October 2024, “comfortably within the government's target range of 2% to 4% for the year.”

Balisacan added that the Philippine labor market remains strong as the total labor force participation rate increased to 65.7% from 64% in the same period last year, with unemployment rate decreasing to 3.7% from 4.5% in September 2023. 

“We expect the BSP's decision to cut policy rates by a cumulative 50 basis points and reduce reserve requirements to boost liquidity to spur growth in private spending, particularly on big-ticket consumer items and investments in capital-intensive infrastructure in the coming quarters, which we see as another significant economic growth driver,” he said.

“This move will support economic growth by making borrowing more affordable for businesses and consumers,” he added. —KBK, GMA Integrated News