PH Economy Grows by 6.3% in Q2 2024,
Second Fastest in ASEAN

8 August 2024 — The Philippine economy in Q2 2024 grew by 6.3% from 5.8% in the previous quarter, exceeding the median forecast of economists at 6%. This brings the country’s real GDP growth to 6.0 in the first half of the year. The Philippines would have to grow at least 6% for the latter part of 2024 in order to achieve the government’s target growth rate of 6-7% for the year. 

On the demand side, Government Spending rebounded significantly in Q2 2024, increasing by 10.7% compared to a modest 1.7% growth in the previous quarter. Household Spending remained steady at 4.6%, matching the previous quarter’s rate. Investment (gross capital formation) saw a substantial rise to 11.5%, up from just 0.5% in Q1 2024. Conversely, Exports of goods and services contracted by 4.2%, while Imports of goods and services grew at a more moderate rate of 5.2%. On the supply side, Services expanded by 6.8% while Industry grew by 7.7%. Specifically, Manufacturing increased by 3.6% while Information and communication, maintaining the progress it began this year. However, Agriculture contracted by 2.3% due to impacts of weather disruptions such as El Nino.

As highlighted in President Marcos’ latest State of the Nation Address, inflation continues to be one of the biggest challenges. The most recent inflation rate for July 2024 was at 4.4%, breaching the government’s target of 2-4%. However, forecasts for the Philippine economy have been optimistic: US consultancy Bain & Co. forecasted that the Philippines is expected to be the second fastest growing country in ASEAN. This is reflected in the latest Q2 figures where the Philippines was right behind Vietnam’s 6.9% growth. Employment has also improved: in June 2024, unemployment declined to 3.1%, the lowest in nearly two decades. 

According to NEDA Sec. Balisacan, government spending is expected to increase later in the year due to the upcoming midterm elections in May 2025. The filing of candidacy will be in early October so effects may be seen towards the end of the year.