The economy grew 5.2 percent in the third quarter of the year brining the nine-month average to 5.8 percent, the Philippine Statistics Authority (PSA) reported yesterday.
The third quarter’s growth was slower than the 6 percent posted in the same period last year and the second quarter’s 6.4 percent.
Arsenio Balisacan, National Economist and Development Authority secretary, said the slowdown was due to a 2.8 percent contraction in agriculture and the moderation of growth in industry and services at 5 percent and 6.3 percent, respectively.
These were attributed to the weather disturbances that hit the country during the third quarter.
To meet the government’s target of at least 6 percent for the whole year, Balisacan said the economy needs to grow by at least 6.5 percent in the fourth quarter.
“We remain optimistic that this growth target is attainable,” Balisacan said, stressing the “increases in holiday spending, more stable commodity prices (given low inflation), lower interest rates, and a robust labor market” will drive the economy to the targeted growth.
The PSA said Gross National Income (GNI) grew 6.8 percent while the net primary income from the rest of the world grew by 19.3 percent, helping the economy’s output to hit P21.3 trillion for the first nine months of the year.
On a seasonally adjusted basis, the third quarter gross domestic product grew 1.7 percent, while GNI grew by 3 percent.
Balisacan said the crops subsector of the agriculture sector posted a year-on-year decline of 2.8 percent, reflecting the impacts of the El Niño phenomenon during the planting season and the effects of seven typhoons, in addition to the habagat, during the harvest season.
Fishing and aquaculture also declined due to the 29-day fishing ban in Cavite and Bataan amid an oil spill incident last July and the cancellation of fishing trips due to bad weather conditions. Livestock production decreased due to the recent outbreaks of African Swine Fever, such as in Batangas last August, he added.
Balisacan attributed the tempered growth of the industry and services sectors to the successive typhoons for the period that suspended classes and work in government and some private offices, resulting in administrative delays and supply chain disruptions.
Still, Balisacan said the Philippines remains one of the fastest-growing economies in Asia in the third quarter, next to Vietnam’s 7.4 percent, eclipsing Indonesia’s 4.9 percent, China’s 4.6 percent and Singapore’s 4.1 percent growth.
He said domestic demand growth remained robust at 6.6 percent for the period, though a bit slower than the 7.4 percent recorded in the second quarter. Household spending grew by 5.1 percent.
“However, the slowdown in tourism and leisure-related spending offset this, as weather disturbances limited domestic mobility. We note that 138 flight cancellations occurred during the third quarter, as reported by NDRRMC (National Disaster Risk Reduction and Management Council),” he said.
Investment growth was at 13.1 percent, with durable equipment driving capital formation growth. Private construction grew by 11.9 percent and public construction, 3.7 percent.
“In the areas affected by typhoons, recovery efforts will drive economic activity and, hopefully, build back better,” Balisacan said.
He also expressed optimism consumer and business sentiments will receive a boost from the easing inflation, and the Bangko Sentral ng Pilipinas’ monetary easing that has reduced policy rates by 50 basis points since August, alongside a reduction in reserve requirements.
“We expect these interventions to spur growth in private spending, particularly on big-ticket consumer items and investments in capital-intensive infrastructure,” Balisacan said.
Finance Secretary Ralph Recto in a statement said to support growth, the government’s economic team is pushing for the swift passage of the proposed national budget of P6.35 trillion in 2025. as it is the government’s biggest tool to grow the economy at a faster rate.
“The national budget is equivalent to 22.1 percent of the country’s 2025 projected GDP,” Recto said, adding more than half of the budget, at 62.5 percent, will be allocated for social and economic services, such as infrastructure, health, education, human capital development, social welfare, employment, housing and other social protection programs.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., sees an upside for faster economic growth given the easing inflation trend and the increased infrastructure spending to contribute to economic growth as the May 2025 midterm elections gets on the way.
“The Philippines has been and would still be among the fastest growing economies in Asean/Asia, with a GDP growth of about 6 to 7 percent amid the country’s demographic sweet spot since majority of the country’s more than 113- million population are already in working age,” Ricafort said.
Jonas Ravelas, managing director at eManagement for Business and Marketing Services, said the government could also support the growth by accelerating spending, which is “slowly improving consumer spending recovery.”
