The Philippine economy grew by 5.6 percent in 2024, but still falls short of the government’s six to 6.5-percent target.
The shortfall was attributed to extreme weather disturbances, geopolitical tensions, and weak global demand, which slowed economic activity in the final quarter of the year.
At a press conference, National Statistician Dennis Mapa reported that while the 2024 gross domestic product (GDP) growth exceeded the 5.5-percent expansion in 2023, it still missed the original six to seven percent target set for the year.
In the fourth quarter of 2024, the economy expanded by 5.2 percent, maintaining the previous quarter’s pace but lagging behind the 5.5-percent growth recorded in the same period of 2023.
Weather disruptions
According to NEDA Undersecretary Rosemarie Edillon, severe weather conditions in late October to mid-November significantly impacted the agriculture, forestry, and fishery (AFF) sector.
This led to a 1.8-percent contraction in the fourth quarter, reversing the 1.3-percent growth seen in 2023.
For the entire year of 2024, the AFF sector shrank by 1.6 percent, following 1.2-percent growth in 2023.
The sector, which contributes about eight percent to GDP and provides jobs for one-fourth of the workforce, suffered from disruptions in crop production, livestock, and fisheries.
Household spending
Despite the usual holiday season boost, household consumption growth slowed to 4.7 percent in Q4 2024, down from 5.2 percent in Q3 and 5.3 percent in Q4 2023.
For the full year, consumption expanded by 4.8 percent, decelerating from 5.6 percent in 2023.
Edillon cited weather disturbances and high food prices as key factors behind the slowdown.
Industry and services
The industry sector grew by 4.4 percent in the fourth quarter, improving from 3.1 percent in Q4 2023.
This brought full-year industry growth to 5.6 percent, surpassing the 3.6-percent expansion seen the previous year.
However, manufacturing remained sluggish, growing by just 3.1 percent in the fourth quarter, reflecting weak global demand and geopolitical uncertainties.
The services sector, a key driver of economic activity, expanded by 6.7 percent in Q4, down from 7.4 percent in Q4 2023.
For the full year, services growth also slowed to 6.7 percent, compared to 7.1 percent in 2023.
'Resilience'
Despite setbacks, the government remains optimistic about achieving its six to eight percent growth target for 2025.
Edillon emphasized the need to diversify growth sources and boost resilience, noting that challenges from climate change, inflation, and global uncertainties may become the "new normal."
“To ensure resilient economic growth, we must encourage investments in high-skill sectors and develop an agile workforce,” she said.
Additionally, Edillon stressed the importance of food inflation control, urging proactive measures to mitigate supply shocks.
Looking ahead, she reaffirmed the government’s commitment to regaining economic momentum through strategic investments and long-term, inclusive growth initiatives.
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