Economy grows by 5.6% in 2024

MANILA, Philippines —  The Philippine economy grew by 5.6 percent in 2024, below the government’s growth target as extreme weather disturbances, geopolitical tensions and weak global demand dampened economic activity in the last quarter of the year.

In a press conference, National Statistician Dennis Mapa said the country’s 2024 gross domestic product (GDP) growth was faster than the 5.5-percent expansion in 2023.

However, last year’s full-year GDP growth  fell short of the Marcos administration’s revised six to 6.5-percent growth target.

The government previously set a six to seven-percent growth target for 2024.

In the fourth quarter, the economy expanded by 5.2 percent, unchanged from the previous quarter, but slower than the 5.5-percent expansion in the fourth quarter in 2023.

“In 2024, we faced numerous setbacks like extreme weather events, geopolitical tensions and subdued global demand, similar to the challenges we encountered in 2023,” NEDA Undersecretary Rosemarie Edillon said.

She said the agriculture sector, in particular, faced several setbacks due to the series of typhoons that hit the country in late October until mid-November last year.

These extreme weather conditions led to a 1.8-percent year-on-year contraction in the agriculture, forestry and fishery (AFF) sector in the fourth quarter compared to the 1.3-percent growth in the same quarter in 2023.

Edillon said the AFF sector, which contributes around eight percent to GDP and provides livelihood for about one-fourth of the workforce, faced disruptions in crop production, livestock and fisheries, further compounding its vulnerabilities.

For full-year 2024,  the AFF  sector declined by 1.6 percent from a 1.2-percent growth in 2023.

While household consumption is typically expected to pick up in the last quarter of the year due to holiday spending, its growth slowed to 4.7 percent in the fourth quarter of 2024 from 5.2 percent in the previous quarter and 5.3 percent in the fourth quarter in 2023.

For full-year 2024, household consumption also grew at a slower rate of 4.8 percent from 5.6 percent in 2023.

Edillon attributed the slowdown  to the series of weather disturbances in the last quarter of 2024 as well as high food prices. She said the industry and services sectors continued to drive economic growth in the fourth quarter of last year.

In particular, the industry sector expanded by 4.4 percent in the fourth quarter of 2024, faster than the 3.1-percent growth in the same quarter in 2023.

This brought full-year growth in industry to 5.6 percent, faster than the 3.6-percent expansion in 2023.

Hampered by the subdued global demand due to geopolitical tensions and the slow recovery of advanced economies, Edillon said the manufacturing sector grew by  just 3.1 percent in the fourth quarter. Services grew by 6.7 percent in the fourth quarter of last year, slower than the 7.4 percent in the same quarter in 2023.

For the whole of 2024, services also registered a 6.7-percent growth, slower than the 7.1-percent expansion in 2023. Edillon said the government is still confident that economic growth can hit the low end of the six to eight-percent growth target for this year.

As setbacks encountered in the past two years may represent the new normal, she said it is necessary to go beyond aiming for higher growth numbers and focus on building resilience.

“To achieve resilient economic growth, we need to diversify our sources of growth. For inclusive quality employment, we must encourage more investments in sectors that require workers with higher-level skills and further develop an agile workforce,” Edillon said.

To keep food inflation low and stable, Edillon said it is necessary to anticipate potential shocks and continue to have multi-pronged approaches.

“Looking ahead to 2025, we want to regain our growth momentum driven by strategic investments and initiatives designed to strengthen resilience and lay the foundation for long-term, inclusive growth,” she said.