Philippines among fastest-growing economies in Asia in 2024

The Philippines remains one of the fastest-growing economies in Asia in 2024, expanding 5.2 percent in the third quarter and 5.8 percent in the first three quarters of the year.

This surpassed the growth in Malaysia (5.2%), Indonesia (5.0%), China (4.8%), and Singapore (3.8%). Such growth was led by robust capital formation and accelerated government spending.

"The Philippine economy has shown remarkable resilience this year. Our gross domestic product (GDP) growth averaged 5.8% for the first three quarters of 2024. We experienced significant weather-related disturbances or disruptions throughout the year: a prolonged dry season due to El Niño and consecutive strong typhoons amid La Niña," National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said in a statement.

"Notwithstanding these disruptions, our growth rate still positions us as one of the fastest-growing economies in Asia. It is a testament to our people's hard work and dedication and the sound policies implemented by our government despite such challenging conditions," Balisacan added.

The Department of Finance (DOF) said the Marcos administration worked to protect the purchasing power of Filipinos from high food prices, keeping inflation firmly within the government's target range in 2024.

Inflation, which averaged 6.0% last year, has decelerated to 3.2% as of end-November this year.

In particular, rice inflation has continued its downtrend from 22.5% in June 2024 to 5.1% in November this year as a result of the implementation of Executive Order (EO) 62 in July 2024, which lowered import tariffs on rice.

The DOF said the average retail price of imported rice in the National Capital Region (NCR) declined by 3.66 pesos per kilogram in the second half of November compared to the second half of June 2024, before EO 62 was implemented.

"This price decrease helped offset the impact of food price hikes caused by successive typhoons Nika, Ofel, and Pepito, and the lingering effects of earlier storms in October and the El Niño in the first half of the year," the DOF said.

It said the continued drop in rice prices, including the setup of more Kadiwa stores nationwide, has benefited the bottom 30% of households as headline inflation for the said group declined to 2.9% in November 2024 from 5.8% in July.

For this year, the overall inflation rate is expected to average from 3.1% to 3.3%.

With inflation settling comfortably within the government's 2% to 4% target, economic managers are optimistic that the lower end of the 6% to 6.5% economic growth target for this year will be attained.

"The economy needs to grow by at least 6.5% to meet the government's target for the last quarter of 2024. We remain optimistic that this growth target is attainable," Balisacan said.

"We remain optimistic about the fourth-quarter economic performance. Holiday spending, more stable commodity prices, and a robust remittance inflow and labor market give us confidence that our 6.0% to 7.0% growth target is still achievable," he said.

For 2025 to 2028, economic managers set a 6.0% to 8.0% economic growth target.

The Development Budget Coordination Committee (DBCC) said that to achieve these targets, the government should accelerate infrastructure investments, enhance the ease of doing business, and boost national competitiveness.

The implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE) is also expected to support businesses, attract foreign investments, and spur higher economic growth.

NEDA said the Philippines has a good chance of attaining upper middle-income country (UMIC) status in 2025.

"We have a good chance of attaining upper middle-income country (UMIC) status in 2025. Attaining this status will require that we achieve our growth target this year, that we maintain our growth trajectory in 2025, and our currency will not weaken significantly relative to the currencies of our major trading partners," said Balisacan.

The World Bank defines UMIC economies as those with gross national income (GNI) per capita ranging between $4,516 and $14,005 for the fiscal year 2025.