Financial News: Philippine GDP Expands Less Than Forecast

Philippine GDP Expands Less Than Forecast

(RTTNews) - The Philippine economy expanded at a slower than expected pace in the fourth quarter as severe storms damped farm output and geopolitical tensions weighed on manufacturing, official data showed on Thursday. Consequently, the economy missed its full year official growth target in 2024.

Gross domestic product grew 5.2 percent year-on-year in the fourth quarter, the same pace as in the third quarter, the Philippine Statistics Authority said. Economists had expected a 5.4 percent growth.

In 2024, overall GDP expanded 5.6 percent, slightly up from 5.5 percent in 2023, the agency said. However, this was weaker than government's target of 6 percent to 6.5 percent.

The expenditure breakdown showed that household final consumption grew 4.7 percent annually in the December quarter, and government final expenditure advanced by 9.7 percent.

Data showed that gross capital formation was 4.1 percent higher, and both exports and imports climbed by 3.2 percent each.

Among the major economic sectors, industry and services grew by 4.4 percent and 6.7 percent, respectively. Meanwhile, the agriculture, forestry, and fishing sector logged a contraction of 1.8 percent.

On a quarterly basis, economic growth accelerated to 1.8 percent from 1.5 percent in the third quarter.

Capital Economics' economist Gareth Leather said decent growth is expected in 2025 as interest rate cuts help offset the drag from weaker exports and tighter fiscal policy. The economist forecasts a 100 basis point reduction in the key interest rates in 2025.

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