Neda still bullish on 2025 growth prospects

MANILA, Philippines — The Philippines probably missed its growth target last year, the state’s chief economist said, while staying optimistic about economic performance in 2025 despite the government having to operate using what President Ferdinand Marcos Jr. had called a “suboptimal” budget.

At a press conference on Friday, Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda) said the destructive typhoons that hit the country late last year might have foiled the economy’s attempt to post a strong growth during the holiday season.

Balisacan said the storms resulted in massive farm output losses that dealt a severe blow on the agriculture sector, which historically contributed about a tenth to gross domestic product (GDP) and accounted for about a quarter of employed Filipinos.

READ: Recto: Gov’t might have missed 2024 growth target

The weather disturbances also caused disruptions in the local labor market, putting more drag to growth, he added.

“Given the developments in the fourth quarter, especially the several typhoons … I expect the fourth quarter [GDP growth] to be not as good as what we had expected,” the Neda chief said.

“We may have difficulty achieving the 6 percent for the full year, but we’ll see,” he added.

Recall that the Marcos administration had aimed for a growth of 6 to 6.5 percent last year.

But latest data showed GDP posted a below-market consensus growth of 5.2 percent in the third quarter of 2024, which was the weakest reading in more than a year following the onslaught of storms that disrupted government spending and damaged farm output.

Average GDP growth stood at 5.8 percent in the first nine months of last year. This means the economy would have to grow by at least 6.5 percent in the fourth quarter of 2024 to meet at least the low-end of the state’s growth target.

As it is, Balisacan is the second economic official to admit that growth last year might have fallen short of official estimates. Last week, Finance Secretary Ralph Recto also gave the same outlook, although he was still confident that the 2025 goal was still achievable.

For 2025, the government wants the economy to expand by 6 to 8 percent.

This, while pursuing a fiscal consolidation program that may crimp state spending and its contribution to economic output.