Philippines Economy Grows in 2024 But Misses Official Target -- Update

By Amanda Lee

The Philippines economy accelerated in the final quarter of 2024, but full-year growth still missed the official target, signaling that the country's recovery still has some way to go.

The Southeast Asian country's gross domestic product rose 5.2% for the October-December period, and 5.6% for the full year, the Philippine Statistics Authority said Thursday.

The annual result missed the government's target of 6.0% to 6.5% and virtually matched the growth seen in 2023, marking one of the slowest expansions since the economy contracted in 2020.

Growth in the fourth quarter held steady from the prior year, just undershooting the median estimate for a 5.3% reading compiled in a poll of seven economists by The Wall Street Journal.

While that still puts the Philippines among the fastest-growing economies in the region, momentum has been shaky through the year, as sticky inflation and high interest rates curbed household spending, and weak external demand weighed on exports.

In a recent note, HSBC economist Aris Dacanay attributed lackluster growth in the first three quarters of 2024 to the fact that household consumption--the economy's primary driver--didn't do as well as it usually does.

Thursday's data showed continued growth in household consumption in the final quarter of the year but at a slower pace than in the prior year. The full-year growth figure also slowed to 4.8% from 5.6% in 2023.

But with inflation back on target and the central bank having started its easing cycle, household consumption should gradually return to regular levels, bringing GDP growth back to the range of 6% or more, Dacanay said.

Stronger consumption would also help insulate the economy from tariff risks.

"To monitor the Philippine economy in 2025, watching household consumption will be key," he said.

Among the top contributors to growth in 2024 were financial & insurance activities at 9.0%, and construction at 10.3%, the PSA said.

Exports were another bright spot, with shipments of goods and services growing 3.4%, accelerating from 1.4% in 2023.

Below are the GDP figures for Philippines in 4Q:

 
4Q GDP                                % Change QQ   % Change YY 
-                                            +1.8          +5.2 
Annual GDP                                                 +5.6 
- 
Major Economic Sectors               4Q % Change YY    FY % Change 
Agriculture, Forestry & Fishing               -1.8            -1.6 
Industry                                      +4.4            +5.6 
Services                                      +6.7            +6.7 
 

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

January 29, 2025 23:07 ET (04:07 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.