PRESS CONFERENCE STATEMENT
Rosemarie G. Edillon, PhD
Undersecretary
National Economic and Development Authority
Philippine Economic Performance for the Fourth Quarter and FY 2024
30 January 2025 | Philippine Statistics Authority
Esteemed members of the media,
Fellow Filipinos,
Ladies and gentlemen,
Good morning.
In 2024, we faced numerous setbacks like extreme weather events, geopolitical tensions, and subdued global demand, similar to the challenges we encountered in 2023. This suggests that these conditions may represent the new normal. While some challenges affect the entire economy, others exert pressure on specific sectors. Consequently, our economic performance in 2024 hinged on the impact of these factors on various sectors and whether we can mitigate the negative effects or enable a swift recovery. In a word, it is about resiliency. Therefore, beyond aiming for higher numbers, our focus is on building resilience.
On behalf of NEDA Secretary Arsenio M. Balisacan, who is currently accompanying President Ferdinand R. Marcos, Jr. on an important visit to Cebu, allow me to discuss the recent economic performance and expound on our strategies to build resilience in this new normal.
The Philippines grew by 5.2 percent in the fourth quarter, unchanged from the previous quarter but slower than the same period in 2023. This brings the full-year average GDP growth rate to 5.6 percent, slightly faster than the 5.5 percent growth in 2023. While this falls short of our target of 6.0 to 6.5 percent, we are positioned as the third fastest-growing economy in the region, trailing Vietnam (7.5 percent) and China (5.4 percent) but outpacing Malaysia (4.8 percent).
The agriculture sector in particular faced several setbacks, particularly between late October until mid-November, when six typhoons struck the country in succession. These extreme weather conditions led to a 1.8 percent year-on-year contraction in the agriculture, forestry, and fishery (AFF) sector in the fourth quarter of 2024. The AFF sector, which contributes around 8.0 percent to GDP and provides livelihood for about one-fourth of the workforce, faced disruptions in crop production, livestock, and fisheries, further compounding its vulnerabilities.
The industry and services sectors continued to drive economic growth in the fourth quarter of 2024, with year-on-year growth expansions of 4.4 percent and 6.7 percent, respectively. Manufacturing grew only by 3.1 percent. This performance has been hampered by subdued global demand due to geopolitical tensions and the slow recovery of advanced economies. In addition, there are industries like semiconductors that still need to update their product offerings to meet changing demand.
It is clear, then, that the key to economic growth in the new normal is to build resilience and ensure adaptability to changing preferences. We just presented the draft Philippine Development Report or PDR 2024 to the President and the Cabinet last week. In the PDR, we take stock of our accomplishments, compare these against the PDP targets, and more importantly, identify the lessons learned and how we move forward to attain our development targets.
In the PDR 2024, we noted that we fell short of our targets for the following: (1) economic growth, although we still emerged as one of the fastest-growing economies in the region; (2) quality employment, although we have achieved our target employment numbers; and (3) food inflation, although it started to go down in the second half of 2024.
To achieve resilient economic growth, we need to diversify our sources of growth. For inclusive quality employment, we must encourage more investments in sectors that require workers with higher-level skills and further develop an agile workforce. To keep food inflation low and stable, we need to anticipate potential shocks and continue to employ multi-pronged approaches.
Looking ahead to 2025, we want to regain our growth momentum driven by strategic investments and initiatives designed to strengthen resilience and lay the foundation for long-term, inclusive growth.
Infrastructure development remains a crucial driver of economic recovery and long-term growth. By the end of 2024, seven infrastructure flagship projects (IFPs) have been completed, with eleven more expected to be finished in 2025. It is essential to collaborate with LGUs to ensure the expedited completion of these projects and that these new infrastructures effectively promote growth within their respective areas.
To boost economic competitiveness, we will enhance operational efficiency and streamline business processes. The Anti-Red Tape Authority (ARTA) will expand partnerships to accelerate the adoption of the Electronic Business One-Stop Shop (eBOSS) across local government units. Meanwhile, key legislative measures including the Foreign Investor’s Long-Term Lease Act, amendments to the Right-of-Way Act, the Konektadong Pinoy bill, and the E-Governance Act will be crucial in attracting investments in infrastructure and priority sectors.
In response to evolving trade dynamics, we will maximize the opportunities with long-standing partners while expanding new free trade agreements (FTAs). We must, for instance, leverage and maximize the Philippines-South Korea FTA and increase investments in post-harvest facilities for bananas and other tropical fruits. The reaffirmed Luzon Economic Corridor partnership with the United States and Japan will further support infrastructure development and market access.
The agriculture sector has faced significant setbacks due to typhoons, droughts, and other climate-related disruptions. To support its recovery and resiliency, the government through the Department of Agriculture, will fast-track the implementation of the National Rice Program to achieve its 20.5 million MT rice production target this year. We are also investing in much-needed irrigation facilities including large-scale irrigation systems and small-scale irrigation projects for high-value crops. Meanwhile, we will fully utilize the increased provision for the Rice Competitiveness Enhancement Fund to improve farm productivity through increased investments in mechanization, irrigation, technology adoption, and climate adaptation strategies.
Tourism will also play a key role in driving growth. The government will explore easing visa requirements and actively participate in initiatives such as the proposed ASEAN common visa policy to enhance visitor inflows. New tourism products, such as those under experiential tourism, are also being developed. Investments in digital and physical tourism infrastructure will improve accessibility, particularly in emerging destinations, and allow us to cater to a new group of tourists, the so-called digital nomads.
In the information technology and business process management (IT-BPM) sector, we will strengthen our talent pipeline through reskilling and upskilling programs, ensuring that the workforce remains competitive in high-value services. This will also support the recovery of the real estate sector, which has been affected by shifts in workplace preferences.
Recognizing the global shift toward a green economy, we will position the manufacturing sector as a key player in sustainable industries. Efforts will focus on expanding the domestic manufacturing base and attracting investments in electric vehicle (EV) batteries, electronics, and other green technologies. Additionally, reforms to the mining fiscal regime will be prioritized to capitalize on the rising demand for critical minerals needed for the energy transition.
Price stability remains a priority to sustain domestic demand. We will ensure a stable food supply and prevent unwarranted price increases through strategic trade policies, timely release and distribution of production and post-production support, and proactive measures against hoarding.
To further support households, we will strengthen the implementation of key social protection programs, such as the Ayuda Para sa Kapos ang Kita Program (AKAP) and the expansion of the Pantawid Pamilyang Pilipino Program (4Ps). This will include the utilization of digital technologies such as the National ID and enhancing guidelines to minimize leakages by integrating monitoring and evaluation mechanisms, ensuring that the most vulnerable receive adequate support and we achieve maximum impact with scarce resources.
These coordinated efforts are part of a broader mission to reduce poverty and foster inclusive growth. By 2028, the government aims to reduce poverty incidence to single-digit, ensuring that far fewer Filipinos experience hunger, and more are resilient to natural and manmade shocks. With a strong labor market, stable inflation, and sound fiscal management, the Philippine economy is on track to sustain its progress toward these goals.
The challenges of 2024 have underscored the importance of resilience, adaptability, and strategic action. As we move forward, the government remains committed to building a prosperous, inclusive, and resilient society. Guided by sound policies and a clear vision, we are poised to overcome uncertainties and sustain and boost our momentum in the year ahead.
Maraming salamat po.
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