PH Q3 Dips to 5.2%, Falling Below Government Target

07 November 2024 — The Philippine economy in Q3 2024 contracted to 5.2% from 6.4% in the previous quarter, falling below the median forecast of economists at 5.7%. This brings the country’s annual GDP growth rate to 5.8%, lower than the government’s target of 6-7% for the year. According to NEDA Secretary Arsenio Balisacan, “the economy needs to grow at 6.5% to meet the government’s target for the last quarter of 2024. We remain optimistic that this growth target is attainable.”

On the demand side, Government Spending fell significantly in Q3 2024, slowing to 5.0% from a robust 11.9% growth in the previous quarter. Household Spending was at 5.1%, slightly up from the previous quarter’s rate of 4.7%. Investment (gross capital formation) went up to 13.1%, up from just 11.6% in Q2 2024. Conversely, Exports of goods and services contracted by 1.0%, from 4.2% in Q2, while Imports of goods and services grew to 6.4%, from 5.3% in the previous quarter. On the supply side, Services expanded by 6.3% while Industry grew by 5%. Agriculture, on the other hand, contracted by 2.8%.

A contraction in the third quarter GDP of the Philippine economy was anticipated due to strong typhoons during the period. According to Bloomberg, total farm output value fell to 3.7% from the previous year – considered to be the largest quarterly decline since 2020. This is due to Super Typhoon Carina which caused around Php 4.73 billion in agricultural damage. This was acknowledged by Sec. Balisacan: “The combined damage and losses in agriculture from the six typhoons in Q3 2024 and severe typhoon Kristine stood at Php 15.8 billion, while damage to infrastructure, houses and other assets is estimated at Php 9.6 billion.” The Philippines is among the world’s most climate-vulnerable countries, and agriculture is often affected by typhoons, droughts, and floods. This makes sustainable farming practices and climate adaptation crucial for food security. MBC advocates for partnerships between the government and private entities that are vital to improve rural infrastructure, such as cold storage, logistics, and transportation networks, which reduce post-harvest losses and improve access to markets.