The Market Monitor Minding the Nation's Business
The Philippine economy continues to show resilience and ranks among the fastest-growing in the region, even amid a moderated growth rate in the third quarter, according to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan.
The Philippine GDP grew by 5.2 percent in the third quarter, compared to 6 percent in the same period last year, bringing the year-to-date growth to 5.8 percent, just shy of the government’s 6-percent target.
“Our economy continues to grow steadily; the latest GDP figures indicate continuous expansion. Of the countries that have reported their third-quarter GDP growth rates, we remain one of the fastest-growing Asian economies,” Balisacan said, ranking the Philippines just behind Vietnam, with 7.4 percent growth, and ahead of Indonesia (4.9 percent), China (4.6 percent), and Singapore (4.1 percent).
While industry and services sectors saw growth at 5 percent and 6.3 percent, respectively, the agriculture sector faced challenges, contracting by 2.8 percent due to the effects of El Niño, multiple typhoons, and an oil spill that impacted fishing activities. African swine fever outbreaks also hindered livestock production, while bad weather conditions forced delays in fishing and agricultural activities.
The slowdown in government final consumption expenditure to 5 percent, down from 6.7 percent, was attributed to recent climate disruptions that affected infrastructure spending and administrative functions.
However, gross capital formation saw a significant increase of 13.1 percent, signaling strong investment activities. Household final consumption expenditure grew by 5.1 percent, supported by easing inflation and a robust labor market.
Despite the moderated growth, Balisacan expressed confidence that the annual growth target remains achievable with expected boosts from holiday spending, stable commodity prices, low inflation, lower interest rates, and continued recovery efforts in typhoon-hit areas.
Recovery aid is already underway, with agencies such as the Department of Agriculture providing P541 million in support to affected regions, while the Department of Human Settlements and Urban Development is assisting with cash and housing repairs for displaced families.
In support of private sector recovery, the Bangko Sentral ng Pilipinas’ recent policy rate cuts and reserve requirement reduction are anticipated to further stimulate spending and investments.
For food security, the Department of Agriculture is stepping up with a new African Swine Fever (ASF) vaccination program, tighter biosecurity, and increased indemnities for affected hog farmers.
Looking to long-term growth, the Marcos administration is committed to advancing infrastructure projects, securing fiscal support for key programs, and engaging in new free trade agreements (FTAs) to expand markets. Balisacan noted active FTA negotiations with the UAE and the EU, aiming to increase export opportunities for non-traditional products like halal goods and service trades, such as finance, IT-BPM, and engineering.
The government is also prioritizing improvements in the ease of doing business to attract more investment and create a business-friendly environment.
Balisacan underscored the need for advancements in technology adaptation, such as artificial intelligence (AI), while addressing potential job displacements by promoting reskilling and lifelong learning programs. He advocated for the swift passage of the Konektadong Pinoy Bill to close the digital divide and bolster growth in the IT-BPM and digital sectors.
In a statement, Finance Secretary Ralph Recto called for rapid Congressional approval of the P6.35 trillion budget for 2025, with 62.5 percent earmarked for social and economic services.
This budget is focused on infrastructure, health, education, human capital, employment, housing, and social protection programs. Recto emphasized that these allocations will drive quality job creation, improve incomes, and contribute to poverty reduction.
For the agriculture sector, the Rice Competitiveness Enhancement Fund (RCEF) will be extended to 2031, with funding increased to P30 billion to support local rice farmers and production.
Recto assured continued government support to ensure productivity improvements across agriculture and fisheries, alongside swift delivery of assistance to typhoon-affected communities for rapid rebuilding and recovery.