2024 Philippines GDP growth may exceed target

The Philippines' economy is doing better than expected, and the government may raise its growth target for this year after inflation slowed down in September 2024.

The Development Budget Coordination Committee (DBCC) is evaluating the possibility of an upward revision in light of the slower-than-expected inflation rate in September, according to Department of Budget and Management Secretary Amenah Pangandaman.

She said the favorable inflation trend indicates that the ongoing economic reforms and interventions, such as tariff adjustments, are contributing to positive outcomes.

The Philippine economy expanded by 6.3 percent in the second quarter of the year, bringing the average growth in the first half to 6 percent. This performance is in line with the government's initial target of 6-7 percent for 2024.

“We want to hit our GDP target. So given this new development, I actually already asked the team, maybe we can have a special DBCC [meeting] again and we’ll try to look at the numbers,” Pangandaman said.

Pangandaman said that the softer inflation rate meant that the current economic reforms and interventions, such as tariff adjustments, have contributed to favorable outcomes.

The country’s inflation rate in September cooled to 1.9 percent, marking the lowest rate in more than four years, driven by a slower rise in prices of food, transport, housing and utilities like water and electricity. This was even better than the Bangko Sentral ng Pilipinas’ forecast range of 2 to 2.8 percent last month.

Once finalized, the budget chief said that there would be an off-cycle DBCC meeting this quarter, particularly because the national budget for 2025 was expected to be passed soon.

“So maybe we can review our targets again and hopefully, we will catch up on all the targets that we have. Maybe we can revise upward,” Pangandaman said.

She said to accomplish this goal, they are carefully reviewing the expenditures and utilization of resources by national government agencies.

“So hopefully, the agencies are able to unload all their budget. They have procured [their requirements] by this time. [It’s] implementation now. So, I hope that contributes to our growth,” she said.

Government data show that the cash utilization rate of the bureaucracy reached 95 percent from January to August. This means that national agencies and local governments, as well as state-owned corporations, were able to use P2.96 trillion out of their P3.12 trillion cash allocation issued as of the end of August.

During the last DBCC meeting on June 27, the economic team had kept the GDP growth target at 6 to 7 percent this year while setting a target of 6.5 to 7.5 percent for 2025.

The Philippines GDP expanded by 6.3 percent in the second quarter, driven by increased state spending and strong investments that offset the adverse impact of high consumer prices on household spending. This brought average first-semester growth to 6 percent, in line with the government’s 6-7 percent target.