The Philippines can still achieve its 6-7% GDP growth target this year, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said on Friday.
“We remain optimistic about the economic performance of the fourth quarter. Holiday spending, stable commodity prices, strong income inflows, and the labor market give us hope that our 6 to 7% growth target is still achievable,” he said during a press conference on Friday.
Mr. Balisacan said fourth quarter GDP growth will likely be faster than the third quarter, amid lower inflation and lower interest rates.
“I think all of this, we believe that the fourth quarter will be better than the third quarter,” he said.
Mr. Balisacan said that this “positive energy” could outweigh the expected reduction in agricultural output due to climate disruption.
In the third quarter, GDP grew by 5.2%, as bad weather hurt agricultural production and reduced government spending. This was slower than the revised 6.4% in the second quarter and 6% last year.
It was also the weakest growth in five quarters or since the 4.3% growth in the second quarter of 2023.
In the first nine months, GDP growth reached 5.8%. The economy needs to grow by 6.5% in the fourth quarter to reach the lower end of the government’s target of 6-7% by 2024.
Mr. Balisacan said that even if the Philippine GDP grows at an average of 5.9% to 6.1% for the full year, this will still be “very respectable growth” compared to most emerging economies.
In the year 2025, Mr. Balisacan said the economy will likely benefit from the rate cuts by the Bangko Sentral ng Pilipinas’ (BSP).
Since starting its easing cycle in August, the BSP has cut borrowing costs by 50 basis points, bringing the rate to 6%.
THE TRUMP IMPACT
Meanwhile, Mr. Balisacan said the Philippines is “ready to work with any economy” as Donald J. Trump will assume the presidency of the United States in January.
He said the Philippines will adjust its policies accordingly as it continues to build “stronger” relations with the US and other countries.
Mr. Trump has proposed a 60% tariff on Chinese imports into the US, and a global tariff of up to 20%.
“The best hope we could do is that what was said during the campaign will be different from what will happen. In order not to incur these high costs, we have increased the prices,” he said.
It would be “bad” for the global economy as it would reduce trade, income flows and so on, said Mr Balisacan.
“We expect that we hope that we will not go there, but it is our priority, even before this development and as seen in our PDP. [Philippine Development Plan]it is to diversify the economy so that we have all these pillars of growth,” he said. – Aubrey Rose A. Inosante
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