Philippine economic growth disappoints in 2024 as risks abound
THE Philippine economy grew slower than expected in the fourth quarter. This dragged growth in 2024 – a year disrupted by storms and flooding – to below the government’s target.
Gross domestic product in the October to December period rose 5.2 per cent from a year earlier, the statistics agency said on Thursday (Jan 30). That’s below the 5.5 per cent median estimate in a Bloomberg News survey and matches the 5.2 per cent pace in July to September.
That puts full-year growth at 5.6 per cent, missing the adjusted 6 to 6.5 per cent target for 2024 and compares with the 5.8 per cent median forecast.
The muted performance of one of the region’s growth stars highlights the challenges posed by natural calamities in an import-dependent nation striving to rein in price pressures. A particularly devastating typhoon season in the second half damaged crops and caused flooding that disrupted commerce.
On the bright side, the central bank took advantage of cooling inflation to deliver 75 basis points in interest rate cuts starting in August, bringing borrowing costs to a two-year low.
Yet rising tariff risks and rapidly evolving US policies are making policymakers cautious, with Finance Secretary Ralph Recto signalling even before the Donald Trump administration took power that rate cuts this year may be fewer and farther apart than in 2024.
Bangko Sentral ng Pilipinas will review the key rate on Feb 13. Governor Eli Remolona earlier this month said that the Philippines still has “some room to ease” as borrowing costs at 5.75 per cent is still in restrictive territory.
The peso was up 0.1 per cent against the US dollar right after the data while the main stock index fell 0.3 per cent. BLOOMBERG
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