The Philippine economy grew by 5.7 percent in the first quarter of 2024, slower than the 6.4 percent expansion recorded in the same period a year ago, according to the Philippine Statistics Authority.
The economy’s growth performance for the said three-month period also fell below the government’s full year growth assumption of six to seven percent.
National Economic and Development Authority Secretary Arsenio Balisacan however said the country has kept its position as the leading force among Asia’s emerging economies.
“I speak before you today with a sense of optimism and pride. Despite our challenges on both domestic and international fronts, our economy continues to demonstrate remarkable resilience and growth,” Balisacan said in a press conference in Quezon City yesterday.
“Our first quarter GDP (gross domestic product) growth rate is about the same as Vietnam’s, surpassing other major economies such as China at 5.3 percent, Indonesia at 5.1 percent and Malaysia at 3.9 percent but slower than India’s projected growth rate of 6.2 percent,” he added.
Despite the damage caused by El Niño, the agriculture sector still managed to inch up by 0.4 percent.
The industry sector, driven by growth in manufacturing and higher output of food, electronics and chemical products, showed robust performance with a 5.1 percent increase.
The services sector also grew by 6.9 percent, supported by the continued recovery of tourism-related activities.
“From the start of the year, we have been experiencing several shocks, the major ones being the long period of the heatwave, and related to that, the El Niño, and geopolitical tensions. Our first quarter economic performance is a testament to our people’s and industries’ resilience,” Balisacan said.
The NEDA chief also highlighted the significant turnaround of the growth of the net exports sector, which rebounded to 9.5 percent, in contrast with the contraction experienced in the same period last year at 11.8 percent and in the fourth quarter of 2023 when it declined by 14.9 percent.
“However, we must acknowledge the moderated growth in our domestic demand, which reflected the less favorable business sentiment. Construction slowed down, no doubt affected by prolonged periods of extreme heat,” Balisacan said.
“Household spending also slowed due to elevated prices of major food items and the heat wave. Meanwhile, government spending also slowed down, primarily due to the sliding of a large amount of expenditure to April this year, whereas the government made such spending in March last year,” he added.
Balisacan also said his “best bet” is that the worst of inflation is already over.
“But as the BSP (Bangko Sentral ng Pilipinas) keeps reminding us, there are still some risks there. And so we keep our guard and ensure that we are able to manage any uptick in the prices. So I think if we can get the public to expect that (in) the future down the road, in the months ahead, of low inflation, moderating inflation that could perk up consumption,” Balisacan said.
“Despite various risks and challenges, the economic outlook for the Philippines in the near and medium term remains bright. With hard work and the right policies in place, we are confident that we will achieve our growth target of six to seven percent this year.
For his part, finance secretary Ralph Recto pointed out that more than the country’s performance in the region, what is to be celebrated is the encouraging growth seen in the manufacturing sector.
“It is the most crucial sector for long-term employment, productivity, value-added generation and innovation. This sets the course for the Philippines to become a premier manufacturing hub in Asia,” Recto said.
“Historically, nations that have achieved successful structural transformation have built competitive manufacturing industries. These industries can effectively harness our young, dynamic, and diverse workforce, which paves the way for a capital-intensive industry sector. Additionally, this is supported by our resilient and growing services sector. So, if we are to sustain our high growth trajectory, we have to focus on expanding both manufacturing and services,” he added.
Meanwhile, budget secretary Amenah Pangandaman pointed out that the seasonally adjusted quarter-on-quarter gross domestic product growth rate also lends optimism as this grew by 1.3 percent in the first quarter of 2024.
“I am confident that growth will accelerate further in the coming quarters as we prioritize shovel-ready projects for a more efficient implementation of the Build-Better-More program,” the budget chief said.
“We will also continue to pursue the catch-up plans submitted by the various National Government Agencies to ensure massive improvement in their budget utilization rates. We also look forward to the passage of the new Government Procurement Reform Act, which will certainly boost efficiency in procurement and exponentially improve budget utilization,” she added.
