Philippines' 2025 GDP growth misses target, but remains among fastest in Asia

The Philippine economy expanded 5.6% in 2024, missing the government's 6%-6.5% target, but still ranking among the fastest growth rates in the region.

The Philippine Statistics Authority (PSA) said gross domestic product (GDP) grew 5.2% in the fourth quarter, bringing full-year 2024 growth to 5.6%, slightly faster than the 5.5% expansion in 2023.

Key drivers in the fourth quarter included wholesale and retail trade; repair of motor vehicles and motorcycles (5.5%), financial and insurance activities (8.5%), and construction (7.8%), the PSA said.

For the full year, the main growth contributors were wholesale and retail trade; repair of motor vehicles and motorcycles (5.6%), financial and insurance activities (9.0%), and construction (10.3%).

"While this falls short of our target of 6.0 to 6.5 percent, we are positioned as the third fastest-growing economy in the region, trailing Vietnam (7.5 percent) and China (5.4 percent) but outpacing Malaysia (4.8 percent)," National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon said.

Edillon emphasized the need to diversify growth sources and encourage investment in sectors requiring higher-level skills to achieve resilient economic growth and inclusive employment.  She also stressed the importance of managing food inflation through various strategies.

Looking ahead to 2025, the government aims to regain growth momentum through strategic investments and initiatives, focusing on infrastructure development and tourism.

"Infrastructure development remains a crucial driver... By the end of 2024, seven infrastructure flagship projects (IFPs) have been completed, with eleven more expected to be finished in 2025," Edillon said, highlighting the need for collaboration with local governments to expedite project completion.

She also noted the importance of tourism, saying the government will explore easing visa requirements and participate in initiatives like the proposed ASEAN common visa policy.  New tourism products, including experiential tourism, are being developed, and investments in digital and physical infrastructure will improve accessibility, particularly in emerging destinations, catering to "digital nomads," she added.

Edillon reiterated that price stability remains a priority.  "We will ensure a stable food supply and prevent unwarranted price increases through strategic trade policies, timely release and distribution of production and post-production support, and proactive measures against hoarding," she said.

Social protection programs like AKAP and the Pantawid Pamilyang Pilipino Program (4Ps) will be strengthened, utilizing digital technologies like the National ID and enhanced monitoring mechanisms to ensure efficient resource allocation to vulnerable populations, she said.

"These coordinated efforts are part of a broader mission to reduce poverty and foster inclusive growth. By 2028, the government aims to reduce poverty incidence to single-digit," Edillon said, adding that a strong labor market, stable inflation, and sound fiscal management are positioning the Philippines to achieve these goals.