Philippine Economy Leads Regional Growth with 5.8% Expansion, Easing Inflation

The Philippine economy has distinguished itself as one of Asia’s strongest performers in 2024, achieving a robust 5.8% growth in the first three quarters. This growth outpaced major regional counterparts such as Malaysia (5.2%), Indonesia (5.0%), China (4.8%), and Singapore (3.8%), despite challenges like geopolitical tensions and climate-related disruptions.

Key drivers of the economy’s resilience include strong capital formation and increased government spending, which propelled a 5.2% growth in the third quarter alone. The National Economic and Development Authority (NEDA) attributes this performance to the country's ability to weather severe disruptions like the El Niño drought and multiple typhoons, underscoring the strength of its recovery.

Adding to the positive outlook is the significant easing of inflation. After averaging 6.0% in 2023, inflation dropped to 3.2% in November 2024, comfortably within the government’s target range. A major factor in this decline was a reduction in rice prices, which plummeted from 22.5% in June to 5.1% in November, following the implementation of Executive Order 62, which lowered rice import tariffs.

The Department of Finance (DOF) reported that these measures, alongside the expanded presence of Kadiwa stores, have particularly benefited the bottom 30% of households. Their inflation rate decreased to 2.9% in November, a significant improvement from 5.8% in July.

With inflation under control and consumer spending expected to rise during the holiday season, the government remains optimistic about hitting its full-year growth target of 6.0-6.5%. Additionally, stable commodity prices and strong remittance inflows are anticipated to provide further economic momentum.

Looking ahead, economic managers have set an ambitious 6.0-8.0% growth target for 2025-2028. Key initiatives to achieve this include accelerating infrastructure projects, enhancing the ease of doing business, and boosting competitiveness.

The recently launched CREATE MORE program, designed to attract foreign investments and stimulate business expansion, is poised to play a pivotal role in sustaining this upward trajectory. With these measures, the Philippines is well-positioned for continued economic growth in the years ahead.