Finance Secretary Ralph G. Recto has underscored that the Philippine economy is once again among the frontrunners in the ASEAN region, posting a strong year-on-year (yoy) growth of 6.3% in the second quarter of 2024 driven by robust construction and higher investments as the Build Better More program gains momentum and investor confidence strengthens.

“We are happy with the back-to-back good news on employment and GDP growth. Our impressive growth performance clearly demonstrates that infrastructure is our way forward. We need to build more, build better, and build faster so that Filipinos can reap the benefits of these high-impact projects at the soonest possible time. They will not only produce more jobs but improve the overall quality of life of our people. Ito ang isa sa mga pinakamahalagang pamana ng administrasyon ni President Marcos, Jr. para sa mga Pilipino sa ilalim ng Bagong Pilipinas,” he said.

The Philippines’ second quarter growth beat Malaysia (5.8%), Indonesia (5.0%), and China (4.7%). Other countries in the region are expected to release their second quarter growth this month.

This brings year-to-date growth to 6.0%, well within the Development Budget Coordination Committee’s assumption (DBCC) of 6.0% to 7.0% for 2024.

The GDP expansion was driven by a significant increase at 11.5% in total investments. Construction posted a high growth of 16.1% boosted by both public and private construction activities.

Specifically, spending on public infrastructure projects posted a strong expansion of 21.8% due to the expedited roll-out of the Build Better More program, especially with the implementation of the Public-Private Partnership (PPP) Code.

Public spending in construction activities helped in ushering in private sector construction, which grew by 9.9%.

Meanwhile, household consumption posted a growth of 4.6% yoy, as Filipinos spent more on miscellaneous goods and services. This is supported by a healthy job market with historically low unemployment rate and consistent inflows of remittances from overseas Filipinos.

“We expect this to further improve for the rest of the year as the government is doing everything it can to keep inflation low and stable,” the Finance Chief said.

Among the major economic sectors, industry and services posted yoy growths in the second quarter of 2024 with 7.7% and 6.8%, respectively.

The industry sector continues to gain strength buoyed by economic activities not only in construction, but also in the country’s vibrant manufacturing sector, mining, and utilities.

A broad-based increase in the services sector was also seen as labor market conditions continue to improve.

Moreover, increasing tourist arrivals continue to support the services sector, which posted a 13.7% growth with 2.8 million arrivals during the first half of the year.

However, the agriculture, forestry, and fishing sector experienced a yoy contraction of 2.3% due to the impact of the El Niño phenomenon.

“But rest assured, we are providing the much needed support for our farmers, fishermen, and the rest of the agriculture workers to improve their productivity,” the Finance Chief added.

Government’s game plan to spur rapid and inclusive economic growth

The proposed national budget of PHP 6.35 trillion in 2025 is the government’s biggest tool to drive investments that will create more quality jobs for Filipinos, increase their incomes, reduce poverty incidence, and grow the economy at an even faster rate.

The national budget is equivalent to 22.1% of the country’s 2025 projected GDP and is higher by 10.1% than the 2024 national budget of PHP 5.77 trillion.

More than half of the 2025 national budget, or about 62.5%, will be allocated for both social and economic services, such as infrastructure, health, education, human capital development, social welfare, employment, housing, and other social protection programs.

Having the highest multiplier effect on the economy, the government will sustain high public spending on infrastructure projects, which is targeted to reach from 5% to 6% of GDP annually.

As inflation cools down and settles within the government’s target band of 3% to 4% for the year, this is seen to further boost household spending.

Private investments are also expected to increase with the expected passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill within this quarter.

Meanwhile, the PPP Code is also expected to foster a more conducive environment for private investment in public infrastructure, especially in power generation and transmission.

“Our efforts have been paying off. Our economic growth is strong, 50.3 million Filipinos have jobs, unemployment rate is historically low, the middle class is growing as more workers are in the formal sector, and we have reduced the poverty rate to its lowest level. Favorable factors are in place to allow us to lift 10 million more Filipinos for the next four years, to achieve a single-digit poverty rate of 9%,” the Finance Chief stressed.

“Sisiguraduhin po ng administrasyong ito na makakamit natin ang layunin na mabigyan ng kalidad na trabaho at magandang buhay na nararapat sa lahat ng mga Pilipino,” he added.