Finance Secretary Ralph G. Recto has pointed out that the Philippines continued to expand by 5.2% in the third quarter of 2024 due to an acceleration in private spending and remains among the fastest-growing economies in Asia.

The Philippines’ gross domestic product (GDP) growth in the third quarter of the year is ahead of Indonesia (5.0%), China (4.6%), and Singapore (4.1%).

For the first three quarters of 2024, the country’s growth also exceeded that of Indonesia (5.0%), China (4.9%), and Singapore (3.3%).

“Household spending is particularly a bright spot growing by 5.1%, faster than the last two quarters due to slower inflation. The recent policy rate cuts and reserve requirement reduction could help bring in more liquidity to the economy and increase our people’s purchasing power,” the Finance Chief said.

“As interest rates come down, private construction will rebound due to lower cost of housing loans, among others. We also expect increased spending, especially on non-essential items as we approach the holiday season given stable prices and our vibrant labor market,” he added.

On the supply side, the industry and services sector continued to expand by 5.0% and 6.3%, respectively, albeit slower than last year due to base effects.

All industry and services sub-sectors posted positive growth rates, with the fastest increase from construction; accommodation and food service activities; and human health and social work activities.

However, the combined lagged impact of El Niño, La Niña, and several typhoons that hit the country resulted in a 2.8% contraction in the agriculture sector during the quarter.

“The government has been responsive in providing the much-needed support for our farmers, fishermen, and the rest of the agriculture workers to improve their productivity,” the Finance Chief said.

“The government is likewise all hands on deck to ensure the quick delivery of assistance to typhoon-affected communities so we can rebuild and recover faster,” he added.

On the demand side, domestic demand growth remained robust at 6.6% as household spending accelerated to 5.1% from 4.7% in the two last quarters.

Meanwhile, total investments sustained its double-digit growth of 13.1% due to improved construction activities. In particular, private construction grew by 11.9% from 10.3% in the previous quarter.

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

The economic team is pushing for the swift Congressional passage of the proposed national budget of PHP 6.35 trillion in 2025 as it is the government’s biggest tool to grow the economy at a 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. These are investments in the Filipino people to create more quality jobs, increase their incomes, and reduce poverty incidence.

In particular, the government will sharpen its focus on preparing the economy and the Filipino labor force for the artificial intelligence-driven future, to sustain growth in the services and industry sectors.

Meanwhile, the government vows to strengthen its climate mitigation as well as disaster preparedness and response efforts to boost resilience.

Aside from budgetary allocations in the national and local governments, the DOF will continue to capacitate local government units (LGUs) through the People’s Survival Fund (PSF) and push for more micro-insurance coverage for vulnerable communities.

To enhance the country’s agriculture sector to ensure food security, the Department of Agriculture (DA) will accelerate the rollout of its African swine fever vaccination program and interventions to improve agriculture production.

In addition, the extension of the Rice Competitiveness Enhancement Fund (RCEF) until 2031, and its expected increase from PHP 10 billion to PHP 30 billion will enhance local rice production and address the needs of rice farmers.

On the part of the DOF, it will intensify whole-of-government efforts, including intensive monitoring and mitigation of price increases on food and non-food items, to keep inflation within the target range.

Meanwhile, 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.

The Public-Private Partnership (PPP) Code is expected to foster a more conducive environment for private investment in public infrastructure, especially in power generation and transmission.

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