Philippine GDP Hits 5.2% in Q4 2024, Misses Target

The Philippines' gross domestic product (GDP) grew by 5.2 percent in the fourth quarter of 2024, according to the Philippine Statistics Authority (PSA). This figure was announced on Thursday, highlighting a slower-than-expected economic expansion. For the entire year of 2024, the country’s GDP growth reached 5.6 percent, falling below the government’s revised target range of 6 to 6.5 percent. Initially, the target was set at 6 to 7 percent, reflecting the challenges faced by the economy throughout the year.

Impact of External Factors

The lower GDP growth in Q4 was largely influenced by a series of storms that disrupted economic activities in the third quarter. As a result, GDP expansion dropped to 5.2 percent, significantly lower than the 5.8 percent recorded in the first quarter and the 6.4 percent in the second quarter. Despite challenges, the Philippine economy showed resilience in the fourth quarter of 2024, with notable growth in the industry sector, particularly in construction and manufacturing. According to the Philippine Statistics Authority (PSA), construction grew by 7.8 percent year-on-year, while manufacturing expanded by 3.1 percent, making them the top contributors to the sector’s performance.

Government Spending Boosts Growth

Another key driver of economic growth was government spending, which accelerated significantly during the quarter. The PSA reported a 9.7 percent increase in government expenditure in Q4 2024, a sharp turnaround from the 1 percent decline recorded in the same period in 2023. For the full year of 2024, government final consumption expenditure (GFCE) grew by 7.2 percent, a substantial improvement compared to the 0.6 percent growth in 2023.

Slower Consumer and Services Sector Growth

However, not all sectors performed equally well. Consumer spending slowed down during the quarter, with household final consumption expenditure growing by 4.7 percent year-on-year. This was lower than the 5.3 percent growth posted in the same quarter of the previous year. Similarly, the services sector expanded by 6.7 percent in Q4 2024, a slower pace compared to the 7.4 percent growth in Q4 2023.

Economic Managers Remain Optimistic

Despite these mixed results, economic managers remain hopeful that easing inflation and lower interest rates will help stimulate consumption and drive growth in the coming quarters. The combination of robust industry performance and increased government spending provides a solid foundation for recovery, even as challenges in consumer and services sectors persist.