PH GDP grows 5.1% in first quarter

PH economy grew faster by 5.4% in Q1 2025 — PSA

Story by TED CORDERO
GMA Integrated News 
08 May 2025

The Philippine economy expanded faster in the first three months of 2025 —described as a “measured start”— amid the growth seen in services, industry, and agriculture sectors, according to the Philippine Statistics Authority (PSA).

The country’s gross domestic product (GDP) —the value of goods and services produced in a period— grew faster by 5.4% in the first quarter of 2025, higher than the upwardly revised growth rate of 5.3% in the last quarter of 2024, PSA chief and National Statistician Claire Dennis Mapa reported at a press conference in Quezon City on Thursday.

This was also the fastest GDP growth rate seen since the third quarter of 2024, albeit slower than the 5.9% growth recorded in the first quarter of 2024.

At constant prices, the economy reached a value of P5.477 trillion during the period, up 5.4% from P5.196-trillion GDP seen in the same quarter last year.

Department of Economy, Planning and Development Undersecretary Rosemarie Edillon said the country’s GDP needs to increase by 6.2% in the remaining quarters of 2025 to hit at least the lower-end of the. government’s growth target of 6% to 7% for the year.

“Our concise description of the first quarter economic performance is a ‘measured start,’” Edillon said.

The Philippines, so far, ranked second among its Asian peers that have already released their first quarter figures.

The country fell behind Vietnam, which grew by 6.9% and tied up with China with the same growth rate of 5.4%.

Nonetheless, the Philippines outpaced Indonesia, Malaysia, and Thailand, which grew by 4.9%, 4.4%, and 2.8%, respectively, according to the DEPDev official.

“This performance underscores the relative resilience of our economy in the face of global volatility,” she said.

“The Philippine economy continues to show signs of a steady growth,” the DEPDev official said.

Major sectors

The economic performance was on the back of the year-on-year growths posted by all of the country’s major economic sectors.

In particular, the Agriculture, Forestry, and Fishing expanded by 2.2%; while Industry and Services sectors grew by 4.5% and 6.3%, respectively. 

“Sa naitalang pagtaas ng GDP na 5.4% sa unang quarter ng taong 2025, ang Services ay nagtala ng pinakamataas na kontribusyon na mayroong 3.9 percentage points. Ito ay sinundan ng Industry na nagtala ng kontribusyon na 1.3 percentage points; at Agriculture, Forestry, and Fishing na nakapag-ambag ng 0.2 percentage point,” Mapa said.

(With the 5.4% GDP growth rate seen in the first quarter of 2025, the Services sector accounted for the biggest contribution of 3.9 percentage points. This was followed by Industry with a share of 1.3 percentage points; and Agriculture, Forestry, and Fishing which contributed 0.2 percentage point.)

The main activities that contributed to the January to March 2025 GDP growth were Wholesale and Retail Trade; Repair of Motorcycles Vehicles and Motorcycles; Financial and Insurance Activities; and Manufacturing with annual growth rates of 6.4%, 7.2%, and 4.1%, respectively.

On the demand side, Household Financial Consumption Expenditure posted a growth of 5.3%.

“Easing food inflation supported household final consumption, which grew by 5.3%, year on year, faster than the 4.7% growth recorded in the fourth quarter 2024,” Edillon said.

Government Final Consumption Expenditure also grew by 18.7%, while Gross Capital Formation posted rose by 4%.

The DEPDev official said the growth in state spending has reflected “the front-loading of public programs in anticipation also of the election ban.”

Moreover, exports of goods and services recorded a surge of 6.2%, while imports of goods and services posted a 9.9% growth rate.

Strategic imperatives

Edillon highlighted the government’s “strategic imperatives” for sustained growth.

“We should note that amid the ongoing trade war, multilateral institutions such as the International Monetary Fund and the World Bank consistently project the country to remain one of the fastest-growing economies in the region this year. However, this is no reason for complacency,” she said.

“On the contrary, the first quarter's performance reinforces the urgency of strategic policymaking, accelerated structural reforms toward economic diversification, and efficient and effective delivery of programs and projects as we near the mid-term of the Marcos Administration,” she added.

The DEPDev official said that managing inflation remains a top priority to ensure that consumer prices remain affordable. 

“The April 2025 inflation rate of 1.4% indicates that our interventions are working,” Edillon said.

The Economic Department official said the government must accelerate its efforts to expand trade partnerships with key economies such as the European Union, United Arab Emirates, United States, and other potential markets amid the global realignment of trade and investments.

“Such engagements will allow us to diversify our export markets, secure broader market access, ensure our businesses (particularly our micro, small, and medium enterprises) to become part of global value chains, and ensure food availability and affordability,” Edillon said.

“On the supply side, we can and must support and capitalize on higher value-added activities in the services sector, a sector in which we have found comparative advantage, especially as digital technologies, including artificial intelligence, gain greater momentum for adoption and industries undergo workforce transition periods,” she added.

Continued strength

Finance Secretary Ralph Recto said that the first quarter performance highlights the continued strength and resilience of the Philippine economy, even amid rising global uncertainties.

“Our growth is strong, inflation continues to ease, private consumption is rising, and our job market remains vibrant. These are clear signals of accelerating domestic demand ahead, which is our strongest shield against external headwinds and trade wars,” he said.

The Finance chief expressed confidence that the government will hit its 6% growth goal for 2025, citing steady fiscal consolidation, easing inflation, and progress in trade negotiations with key partners, among other initiatives. 

“The national government’s revenue collections for the first quarter 2025 remain on track due to the strong performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), which drove tax collections to PHP 931.5 billion, a double-digit increase of 13.55% compared to the same period last year,” Recto said.

He added that as inflation continues to cool down, private spending is expected to further improve. 

The lower-than-expected inflation rate of 1.4% in April 2025 also provides more room for the BSP to further cut policy interest rates to help boost the spending power of Filipinos, drive in more investments, and grow the economy, according to Recto.

Recto added that private investments are expected to increase with the implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

Likewise, Trade Secretary Cristina Roque said the administration’s focus remains on attracting high-quality investments in key sectors, ensuring consumer protection and empowering micro, small, and medium enterprises and local industries. 

Global uncertainties

Both the Finance and Trade chiefs  raised the ongoing global economic uncertainties, especially the reciprocal tariff policy of US President Donald Trump.

“We recognize the current global economic complexities, and we are responding with strategic focus and a commitment to open communication. The DTI will continue to monitor trends, engage stakeholders, and adapt policies to ensure sustained growth that leaves no one behind,” Roque said.

“On the other hand, significant progress has been achieved by the government in its trade negotiations with the United States. The Philippine government also continues to actively pursue new and expanded free trade agreements with economies like the United Arab Emirates, the European Union, Chile, and Canada to diversify export markets,” Recto said.

Trump, last month, announced a sweeping reciprocal tariff policy on its trading partners, including the Philippines which would be facing a 17% tariff on its imports to the US.

Although it is lowest among its Southeast Asian peers, still the Philippine government was prompted to send a delegation to Washington to seek dialogue with US officials while a 90-day pause in implementing the trade policy was ongoing.

On May 2, Roque, along with Economic Affairs adviser Frederick Go and Philippine Ambassador to the United States Jose Manuel Romualdez, met with US Trade Representative Jamieson Greer and tackled “mutually beneficial ways to strengthen the bilateral relations” amid the 17% tariff rate imposed by the US on Manila. 

A series of meetings would follow after Philippine trade and economic officials met with the Office of the United States Trade Representative (USTR) in Washington, D.C. earlier this month for a trade dialogue concerning the planned 17% tariff to be slapped on the country’s goods entering the US.— RSJ/VAL/BM GMA Integrated News

Ilocos Norte eyed as economic hub in Southeast Asia

Ilocos Norte eyed as economic hub in Southeast Asia

Louella Desiderio 
The Philippine Star 
March 9, 2025

MANILA, Philippines — The Public-Private Partnership (PPP) Center and the provincial government of Ilocos Norte have teamed up to promote the province as a key economic hub in Southeast Asia through the implementation of PPP projects.

In a statement, the National Economic and Development Authority (NEDA) said a memorandum of agreement (MOA) was signed on Feb. 28 at the PPP Center office in Quezon City.

The event was led by PPP Center executive director Ma. Cynthia Hernandez and Ilocos Norte Gov. Matthew Marcos-Manotoc, with NEDA Secretary Arsenio Balisacan and PPP Center deputy executive director Jeffrey Manalo in attendance.

The MOA aims to improve infrastructure development and spur economic growth in Ilocos Norte by focusing on a robust pipeline of PPP projects.

The parties will be working together in the various stages of the PPP implementation process, including project review, approval, procurement, implementation and monitoring.

To transform the province into an economic hub in the region, there are plans to revive international flights to China, Hong Kong and Taiwan from the Laoag International Airport.

This would boost tourism and increase connectivity between Ilocos Norte and major international markets.

In addition, the partnership will push for policies to support the agriculture sector through the organization of cooperatives to promote sustainable agricultural practices.

The parties will also work together in promoting innovations in renewable energy, data centers and manufacturing to encourage both local and global investments and create high-quality jobs.

“By leveraging the strengths of both the public and private sectors, we can mobilize resources, enhance efficiency and ensure long-term sustainability in our development efforts,” Balisacan said.

He said PPPs play a crucial role in accelerating economic growth and the PPP Center can facilitate the implementation of such projects.

The government is pushing for PPPs to address the country’s infrastructure gaps and tap into the private sector’s expertise.

“I hope the activities outlined in the MOA and the lineup of proposed projects by the provincial government inspire other local government units and implementing agencies to explore PPPs as a means for rapid and sustainable economic transformation,” Balisacan said.

Pushing for Greater Manila Bay development

Development of Greater Manila Bay area pushed

Louella Desiderio 
The Philippine Star 
August 24, 2024

MANILA, Philippines — The development of the Greater Manila Bay area similar to the Guangdong-Hong Kong-Macao Greater Bay Area is being pushed to enable the Philippines to attract more investments, according to the Filipino-Chinese Chambers of Commerce and Industry (FFCCCII).

During the Manila Forum for Philippines-China Relations, FFCCCII president Cecilio Pedro said China Ambassador Huang Xilian has proposed to Filipino-Chinese businessmen the development of the Greater Manila Bay area.

“He saw there is potential because we’re linking up Bataan and Cavite. So in between is the greater Manila and Bulacan,” Pedro said.

He said FFCCCII believes this can help bring more investments in the area.

The Guangdong-Hong Kong-Macao Greater Bay Area is composed of Hong Kong, Macao and nine cities in the Guangdong province such as Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing.

The Greater Bay Area is built around economic centers in the Pearl River Delta in Guangdong Province, including the former European colonies Hong Kong and Macau as well as the manufacturing powerhouse of Shenzhen.

It is being developed to fully leverage the advantages of the areas covered, facilitate integration in the region and promote economic development.

The Greater Bay Area in China has a $1.98-trillion gross domestic product, making it among the fastest-growing regions in China.

While the Philippine government is pushing for the development of the Luzon economic corridor with the support of the United States and Japan, Pedro does not see any issue in also undertaking the development of the Greater Manila Bay area.

“The more, the merrier,” he said.

He said attracting investments in many areas will help create jobs.

The development of the Luzon economic corridor is an outcome of the Trilateral Leaders’ Summit of the US, Japan and the Philippines held last April.

It also forms part of the Partnership for Global Infrastructure and Investment, an initiative of the Group of Seven or G7 to advance public and private investments in sustainable, inclusive, resilient and quality infrastructure.

Among the projects being planned to support the development of the Luzon economic corridor are the Subic-Clark-Manila-Batangas Railway System, the Clark International Airport expansion and the Clark National Food Hub.

The National Economic and Development Authority (NEDA) has proposed 21 projects with an initial cost estimate of P2.126 trillion that the US and Japanese governments may consider to support for the development of the Luzon economic corridor.

NEDA Undersecretary Joseph Capuno earlier said the agency, together with the Department of Transportation, presented 21 projects that may be considered for financing and support during the steering committee meeting for the Luzon economic corridor last May,

Of the 21 projects, he said 12 have a combined cost estimate of P2.126 trillion, while the cost of the nine other projects have yet to be determined.

NEDA Secretary Arsenio Balisacan said the projects that would become part of development of the Luzon economic corridor could get another source of funds and be implemented faster, based on readiness.

Philippines economy grows in Second Quarter

Philippines Q2 GDP rises 6.3% y/y, just above forecasts

The Star (Malaysia)
08 August 2024

MANILA: The Philippine economy grew 6.3% in the second quarter from a year earlier, driven by government spending and investment, the statistics agency said on Thursday, stronger than upwardly revised 5.8% growth in the first quarter.

That took first-half GDP growth to 6.0%, putting the economy on track to meet the full-year growth target of 6.0% to 7.0%, Economic Planning Secretary Arsenio Balisacan told a news conference.

Inflation, which has hampered consumer spending, will revert to its longer-term downtrend, Balisacan said.

Economists in a Reuters poll had expected annual gross domestic product growth of 6.2% in the April-June quarter.

On a seasonally adjusted basis, the economy grew 0.5% quarter-on-quarter, below both the 0.9% growth forecast in a Reuters poll and the 1.3% pace in the first quarter. - Reuters

Philippines is set for further expansion over the next decade

PH to grow by 6.1 percent in the next 10 years – report

Story by Mariedel Irish U. Catilogo @CatilogoIrish

Inquirer.net

02 Aug 2024

The Philippines is set for further expansion over the next decade, driven by the Marcos administration’s commitment to increase infrastructure investments, according to a report released on Thursday.

The global consultancy firm Angsana Council, Bain & Company, and DBS Bank placed the country’s gross domestic product (GDP) growth at 6.1 percent for the next 10 years, sitting at the lower level of the government’s 6 to 7 percent growth target this year.

The country’s projected growth of 6.1 percent over the next decade places it behind Vietnam, which is expected to grow by 6.6 percent, but ahead of the Southeast Asia average growth forecast of 5.1 percent.

For the first quarter, the economy grew by 5.7 percent, faster than the 5.5 percent growth in the last three months of 2023.

The report attributed the positive outlook to the government’s increased infrastructure investments and a growing workforce, aligning with the World Bank’s description of the country as being in a “demographic sweet spot”.

Government data showed that 64 percent of the Filipino population of over 110 million belongs to the working-age group of 15 to 64 years old which means that the country has the potential to become rich before its population gets old.

The report also noted the country’s growth in infrastructure, as measured by the gross fixed capital formation, grew by 8.2 percent in 2023, slower compared from the 9.8 percent seen in 2022. Meanwhile, its share to GDP reached 23.3 percent, the highest since the 26.7 percent in 2019.

Looking ahead, the government is expected to spend P1.28 trillion on infrastructure and capital outlays next year. This was higher by 3.04 percent from the P1.24 trillion budget this year.

The Marcos administration seeks to spend 5 to 6 percent of GDP on infrastructure annually.

According to the National Economic and Development Authority, there are 185 projects amounting P9.56 trillion in the pipeline, of which majority comes from the Department of Public Works and Highways with 74 and the Department of Transportation with 69.

Despite this, the report highlighted factors that could possibly dampen the country’s growth.

“Traditional growth drivers lagging other Southeast Asian countries (education, infrastructure, government effectiveness) and geopolitics, especially tensions with China, might escalate, disrupting recovery,” the report said.

Philippines Q2 GDP growth seen faster

Philippines Q2 GDP growth seen faster —economic managers

Story by JON VIKTOR D. CABUENAS, TED CORDERO
GMA Integrated News 
23 July 2024

Philippine economic growth likely accelerated in the second quarter due to higher household spending as inflation fell within the government’s target range, economic managers said Tuesday.

Economic managers expect the second-quarter economic growth to hit 6.0%, faster than the 5.7% in the three months prior and the 4.3% in the second quarter of 2023.

“It's probably close to at least the lower end of the target,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan told reporters on the sidelines of the Post-SONA Discussions in Pasay City.

The government has set a gross domestic product (GDP) growth target of 6% to 7% for 2024.

Finance Secretary Ralph Recto said the biggest growth driver would still be consumption.

"Still, number one will be consumption because that’s the biggest part. I mean, household consumption is number one, and that’s supported by what we see on bank lending and credit cards, in spite of high interest rates,” Recto said.

The latest data available from the Bangko Sentral ng Pilipinas (BSP) showed that bank lending hit a 14-month high of P12 trillion in May, reflecting 10.1% year-on-year growth, the fastest since March 2023.

Meanwhile, the Monetary Board of the central bank in its latest policy meeting kept policy rates at 17-year highs, even as it revised its risk-adjusted inflation outlook for 2024 downward to 3.8% from 4.0% previously.

Balisacan said the latest indicators point to better GDP growth figures in the second quarter.

“The employment numbers are okay. Exports for the first half are turning out well,” the NEDA chief said.

Data from the latest Labor Force Survey as of May showed that the employment rate stood at 95.9%, equivalent to 48.87 million individuals with jobs or livelihoods during the period.

Moreover, exports from January to May amounted to $30.84 billion, up 7.8% from $28.61 billion in the same period last year, according to the Philippine Statistics Authority.

“These are pretty good indicators,” Balisacan said. “I'll wait for a few more numbers, especially the official data.” —VBL, GMA Integrated News

BBM era ushers in economic boom

Marcos Jr. era ushers in economic boom: Philippines’ over 6% growth outpaces Southeast Asian neighbors

BILYONARYO.COM
July 17, 2024

The Philippine economy has clocked more than 6 percent growth since President Ferdinand Marcos Jr. took office in 2022.

According to Marcos’ economic managers, the average growth rate hit 6.1% from the third quarter of 2022 to the first quarter this year, eclipsing regional peers like Indonesia, Malaysia, Singapore, and Thailand.

This momentum is expected to carry through 2024 and 2025, with the Development Budget Coordination Committee forecasting a growth range of 6.0-7.0 percent and 6.5-7.5 percent, respectively.

The IMF and ADB echo this optimism, both projecting at least 6 percent growth for the Philippines in the next two years.

Domestic demand and a rebound in merchandise exports, particularly electronics, fueled the 5.7 percent growth in the first quarter.

Continued infrastructure spending and buoyant service exports, including tourism and business process outsourcing, also played a role.

However, National Economic and Development Authority Secretary Arsenio Balisacan cautioned that long-term sustainability hinges on infrastructure development and economic diversification.

The government’s Philippine Development Plan (PDP) 2023-2028 prioritizes infrastructure investment to create jobs, boost competitiveness, and improve regional connectivity.

Balisacan highlighted the “Build Better More” program’s 185 flagship infrastructure projects, valued at P9.54 trillion as crucial for achieving the 5-6% annual infrastructure spending target.

The program has seen three project completions so far, with 63 underway, 31 approved, and others in various stages of development.

Philippines Exceeds Gross National Income Per Capita Target In 2023

Philippines Exceeds Gross National Income Per Capita Target In 2023

By PAGEONE Business Today
July 5, 2024

The Philippines exceeded its Gross National Income (GNI) per capita target for 2023 under the Philippine Development Plan (PDP) 2023-2028 and is on track to becoming an upper middle-income country in the next two years, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said on Wednesday.

Data released by the World Bank last July 1 showed that the country’s GNI per capita reached USD4,230 last year, surpassing the USD3,130 to USD4,203 GNI per capita target set under the PDP.

The GNI per capita last year was also higher by 7.1 percent than the previous year.

GNI per capita measures the economic output per citizen, encompassing both domestic and international earnings.

A higher GNI per capita is one indication of greater economic prosperity and a higher standard of living.

“Achieving the GNI per capita target for 2023 solidifies our trajectory toward attaining Upper Middle-Income Country (UMIC) status within the next two years. However, our mission is far from complete,” Balisacan said.

“While we, of course, welcome news of such progress, what matters more to us is that the fruits of economic growth—opportunities, better jobs, and higher incomes—are felt by all Filipinos, especially the poor. The government must persist in its efforts to ensure that our economic gains are shared equitably, with the aim of reducing the poverty rate to a single-digit level by 2028,” he said.

The World Bank defines UMIC economies as those with GNI per capita ranging between USD4,516 and USD14,005 for the fiscal year 2025.

Balisacan earlier said the Philippines is poised to achieve UMIC status by 2025, provided the economy sustains its robust growth rate.

For this year, the economic growth target was set at 6 to 7 percent.

For 2025, economic managers earlier set a 6.5 to 7.5 percent economic growth target.

“The expected transition to Upper Middle-Income Country status is an indication that we are headed in the right direction. More importantly, I should say, our focus now is on sustaining the momentum. We are working double time to further improve the policy and regulatory environment to enable a balanced mix of industries that will sustain the growth of the Philippine economy in the years to come,” Balisacan said.

“With our accelerated infrastructure drive enhancing connectivity across the country, we also want more of our lagging regions contributing to our growth as we also push for inclusivity. More than hitting a number, the ultimate goal is to improve our people’s lives,” he added. (PNA)

PH, UN strengthens partnership to implement sustainable devt

PH, UN strengthens partnership to implement sustainable devt

Story by The Manila Times
13 May 2024

The Philippine government and the United Nations (UN) in the Philippines operationalized a strategic partnership toward achieving the UN's Sustainable Development Goals (SDG) and implementing the Philippine Development Plan (PDP) 2023-2028.

Held at the National Economic and Development Authority (Neda) Central Office on May 3, the inaugural meeting of the Joint Steering Committee (JSC) on the 2024-2028 UN Sustainable Development Cooperation Framework (UNSDCF) of the Philippines brought together key stakeholders, including the Philippine government and the UN, with the former represented by the National Economic and Development Authority (Neda) and the Department of Foreign Affairs (DFA).

The Terms of Reference (ToR) approved during the meeting outline the cooperation between the Philippine government and the UN under a new partnership for 2024-2028. This blueprint sets the stage for coordinated efforts to achieve the UN's SDGs while aligning with the country's PDP 2023-2028. Secretary Arsenio Balisacan highlighted the significance of this partnership saying, "The UNSDCF complements our national development plan, serving as a guiding framework that fosters synergy with the international community. By crafting the UNSDCF collaboratively, the government and the UN aim to maximize impact and create a harmonious approach to sustainable development."

During the meeting, the JSC also endorsed key documents from the Cooperation Framework and reviewed the current UN portfolio in the Philippines, focusing on human capital development, inclusion, and resilience building; sustainable economic development, decent work, and innovation; as well as climate action, environmental sustainability, and disaster resilience. Additionally, the UN Philippines presented an overview of resource requirements for the next four years, along with a joint work plan for 2024 that carries an estimated budget of $211 million.

NEDA presented the ToR for the JSC and the Joint Results Group (JRG), emphasizing the primary role of each JRG in facilitating the implementation of programming priorities and ensuring internal coherence. Foreign Secretary Enrique Manalo emphasized that the UNSDCF is anchored in the spirit of strategic partnership and collaboration, aligned with the Philippines' economic trajectory to become an upper-middle income country. He stressed that no strategic priority is self-contained, with each one contributing to attaining the country's mid-term and long-term priority development goals, as well as Ambisyon Natin 2040.

"We can all look forward to reaping the benefits of a partnership with the UN that is characterized by Philippine ownership of the process, greater transparency, as well as targeted programs and deliverables tailor-made for us to enjoy the benefits of the reformed United Nations development system," Secretary Manalo said.

The UNSDCF recognizes the Philippines' localization agenda of the SDGs and its transition toward achieving upper-middle income status to ensure that no one in the Philippines is left behind. Under this new modality of the UN organization, resources will be allocated to capacity development, technical assistance, policy advice, thought leadership, partnerships, and knowledge sharing.

"The CF marks the start of a new generation of UN-Government cooperation instruments, and with this change, we are innovating ways to enhance our collaborative work with the Philippine government as we shift from traditional development assistance to transformative strategic partnerships for policy and capacity development, knowledge generation and the leveraging of financial resources," stated UN Resident Coordinator in the Philippines Gustavo Gonzalez.

The UNSDCF was signed on October 24, 2023, by the Philippine government and the United Nations in the Philippines. The JSC serves as the main governing body of the UNSDCF and is a key mechanism for providing strategic direction and oversight for UN support in the country towards the joint development priorities outlined in the Cooperation Framework.

Philippine economy grew 5.7% in Q1

Philippine economy grew 5.7% in Q1

Story by Ian Nicolas P. Cigaral
Inquirer.net
09 May 2024

MANILA — The Philippine economy grew by 5.7 percent in the first quarter of the year, faster than the 5.5 percent growth in the previous quarter, amid stubbornly high inflation and elevated borrowing costs, the Philippine Statistics Authority (PSA) reported Thursday.

The first quarter gross domestic product (GDP) growth, however, fell short of the government’s target for the period and slower than the 6.4 percent expansion in the same three months in 2023.

The Marcos administration has set its GDP growth target at 6 to 7 percent for this year.

“From the start of the year, we’ve been experiencing shocks,” Secretary Arsenio Balisacan of the National Economic and Development Authority said.

Some analysts said chasing a 6-percent growth would be difficult for the Philippines as long as interest rates remain high.

So far, the Bangko Sentral ng Pilipinas (BSP) has kept its key rate unchanged at 6.5 percent, the highest in almost 17 years. Governor Eli Remolona Jr. now expects borrowing costs to remain higher for a longer period as stubbornly high inflation prevents the central bank from cutting rates sooner.

The Monetary Board, the highest policymaking body of the BSP, will hold its next rate-setting meeting on May 17, with the market widely expecting the central bank to maintain its ultra-tight monetary policy.

A high-interest rate environment can hurt consumption, which has already been battered by fast-rising consumer prices. This prompted the Marcos administration to cut its GDP growth target this year to 6 to 7 percent, from 6.5 to 7.5 percent previously.

According to the PSA, the main contributors to the first quarter of 2024 growth were: financial and insurance activities, 10 percent; wholesale and retail trade; repair of motor vehicles and motorcycles, 6.4 percent, and manufacturing, 4.5 percent.

All major economic sectors —agriculture, forestry and fishing, industry, and manufacturing — posted year-on-year growths of 0.4 percent, 5.1 percent, and 6.9 percent, respectively.

Philippines inflation easing - World Bank

World Bank sees inflation easing in Philippines

Story by Louella Desiderio

Philstar Global

05 April 2024

MANILA, Philippines — Inflation in the Philippines is expected to decline, but geopolitical conflicts that may drive up fuel prices are seen to pose risks, according to the World Bank.

Ayhan Kose, deputy chief economist of the World Bank group, told reporters that the multilateral agency expects a decline in global inflation, as well as in the Philippines.

“We are expecting inflation to continue coming down in the Philippines as well,” he said.

Inflation snapped a four-month downtrend as it quickened to 3.4 percent in February from 2.8 percent in January due to faster food and transport price increases.

Food inflation, in particular, rose to 4.8 percent in February from 3.3 percent in January due to increases in rice and meat prices.

Earlier this week, the Bangko Sentral ng Pilipinas (BSP) said it expects inflation to have continued to pick up in March to settle within the range of 3.4 to 4.2 percent.

The BSP said the continued increases in the prices of rice and meat, higher domestic oil prices and electricity rates are primary sources of upward pressures in March.

Meanwhile, lower prices of fruits, vegetables and fish along with the peso appreciation were cited as factors that could contribute to downward price pressures.

The Philippine Statistics Authority is set to report inflation data for March today.

While the World Bank expects inflation to decline, Kose said the multilateral agency has a cautious outlook on how inflation is going to evolve and how monetary policy is going to respond in the United States and other advanced economies, citing risks such as geopolitical tensions, which could affect global trade and prices.

“The elevated geopolitical tensions could disrupt commodity markets and could basically increase inflationary pressures,” he said.

He said a large part of inflation movements are driven by oil prices, especially in countries that depend on imported oil like the Philippines.

If oil prices go up due to intensified geopolitical conflicts, he said this could lead to higher inflation and delay interest rate cuts.

Gonzalo Varela, lead economist for the Philippines at the World Bank, said how the BSP would go about its rate cuts would depend on what happens with supply-side shocks and inflation expectations.

National Economic and Development Authority Secretary Arsenio Balisacan said the government is committed to keep inflation within the target range of two to four percent this year.

“We’ll work very hard to address the non-monetary measures that are contributing to that resurgence of inflation in recent months,” he said.

Philippines on track to achieve upper middle-income status

Philippines on track to achieve upper middle-income status by 2025, NEDA Sec. Balisacan says

BY XANDER DAVE CEBALLOS

Manila Bulletin

Mar 25, 2024

The country’s socioeconomic planning agency remains positive that the Philippines will become an upper middle-income economy by next year.

National Economic and Development Authority Arsenio M. Balisacan said that the country remains on track to achieving an upper middle-income status in 2025 which may be attributed to a higher economic growth, as measured by gross domestic product (GDP), and slow population increase.

“The numbers are pointing at an upper middle-income status by next year if we achieve at least six percent growth of GDP, and by all indications, I think that six percent should be doable,” Balisacan told reporters.

“And there's another positive factor that we saw recently in terms of population, population numbers are actually lower, while the latest census we had showed slower population growth,” he added.

Being an upper middle-income country is to have a gross national income (GNI) per capita income range of $4,466 to $13,845 as measured by the country’s final income in a year and its population.

As per writing, the World Bank categorizes the Philippines as a lower middle-income country with a GNI per capita of $3,950.

The Marcos administration aims to bring the Philippines to "upper-middle income status by 2024" as also aligned with the World Bank’s target.

For the current 2024 fiscal year, low-income economies are categorized as those with a GNI per capita of $1,135 or less in 2022; lower middle-income economies are those with a GNI per capita between $1,136 and $4,465; upper middle-income economies are those with a GNI per capita between $4,466 and $13,845; high-income economies are those with a GNI per capita of $13,846 or more.

Meanwhile, the country’s ASEAN-4 neighbors Malaysia, Thailand, and Indonesia have per capita incomes of $11,700, $7,200 and $4,900, which all lie in the upper-middle-income category.

Cut poverty rate

Before becoming an upper-middle-income country, the Philippines is urged to address its poverty rate first.

According to a report by French Development Agency (AFD) Country Risk Economist Benoît Jonveaux, the country remains below its ASEAN neighbors in terms of per capita GDP in purchasing power parity.

“In 2022, it was 50 percent lower than in Indonesia, 30 percent lower than in Vietnam, and almost two times lower than in Thailand,” he said.

“Similarly, the path towards poverty reduction (although there has been a sharp decline in poverty) and human development falls slightly below neighboring countries,” the report reads.

The poverty rate in the country was still at 18.3 percent in 2019 but was still lower than 35.3 percent in 2010, based on the World Bank threshold for lower middle-income class countries.

However, the country’s poverty rate remains below compared to Vietnam at 5.3 percent and Thailand at 1 percent, based on the report.

To resolve this, the report cited the need to address access to financing, the relatively low productivity of workers, and the cost of electricity, which is the highest in the ASEAN region after Singapore.

It also noted the need to address the country's governance as the "World Bank’s governance indicators on the rule of law, corruption, and government effectiveness have also declined since 2016 and are in the bottom half of the institution’s global rating."