As-Delivered Press Statement of NEDA Secretary Arsenio M. Balisacan
on the Philippine Economic Performance
for the First Quarter of 2024
Philippine Statistics Authority
12/F Eton Centris 5, Quezon City
09 May 2024 | 10:00 AM
Good morning, everyone!
I speak before you today with a sense of optimism and pride. Despite our challenges on both domestic and international fronts, our economy continues to demonstrate remarkable resilience and growth.
As Undersecretary Dennis Mapa reported, our gross domestic product increased by 5.7 percent in the first quarter of 2024. This performance retains the country’s position as a leading force among Asia’s emerging economies. Our first quarter GDP growth rate is about the same as Vietnam’s, surpassing other major economies such as China at 5.3 percent, Indonesia at 5.1 percent, and Malaysia at 3.9 percent, but slower than India’s projected growth rate of 6.2 percent.
From the start of the year, we have been experiencing several shocks, the major ones being the long period of the heatwave, and related to that, the El Niño, and geopolitical tensions. Our first quarter economic performance is a testament to our people’s and industries’ resilience.
Despite the damage caused by El Niño, our Agriculture sector still managed to record growth, albeit at a slower pace of 0.4 percent. The Industry sector, driven by growth in manufacturing and higher output of food, electronics, and chemical products, showed robust performance with a 5.1 percent increase. The Services sector also grew by 6.9 percent, supported by the continued recovery of tourism-related activities.
Fueling our optimism is the significant turnaround of the growth of the net exports sector, which rebounded to 9.5 percent. This growth starkly contrasts with the contraction experienced in the same period last year at -11.8 percent and in Q4 of 2023 at -14.9 percent. The primary driver of this increase in our merchandise exports was the recovery in exports of electronic products. In contrast, merchandise imports remained muted due to a decline in imports of transport equipment.
However, we must acknowledge the moderated growth in our domestic demand, which reflected the less favorable business sentiment. Construction slowed down, no doubt affected by prolonged periods of extreme heat. Household spending also slowed due to elevated prices of major food items and the heat wave. Meanwhile, government spending also slowed down, primarily due to the sliding of a large amount of expenditure to April this year, whereas the government made such spending in March last year.
Ensuring food security remains the top goal. Given extreme weather conditions and climate change, we will invest more in research and innovation to enable our agriculture and food systems to cope with this challenge. We have seen how pre-emptive measures have significantly mitigated the impact of El Niño on the agriculture sector. But a lot more needs to be done, in addition to adjustments in planting calendars. In the meantime, the government is committed to utilizing strategic trade policies to augment domestic production and establish mechanisms to empower consumers to combat inflation. We reiterate that failing to augment local production with importation during shortages can exacerbate food insecurity and perpetuate poverty.
We will continue to implement a whole-of-government approach to alleviate the impact of El Niño while preparing for La Niña. We are collaborating with distribution utilities to manage the increasing electricity demand and working with private water concessionaires to address leaks and wastage, ensuring water security.
We also continue to focus on spurring investments and creating employment opportunities. To achieve the target of attracting 7.7 million tourists this year, the Department of Tourism is focusing on improving quality tourism infrastructure projects and developing new tourism sites. The “Build-Better-More” infrastructure program and the National Housing Program or “4PH” will also significantly improve our physical and social infrastructure. The full implementation of the PPP Code, through the issuance of its implementing rules and regulations, is expected to increase private sector participation in financing major projects. President Ferdinand R. Marcos, Jr. issued Executive Order No. 59 primarily to expedite the implementation of our 185 Infrastructure Flagship Projects or IFPs with an indicative total cost of about PhP 9.14 trillion.
We also intend to take advantage of trade deals such as the CHIPS Act of the United States, which aims to improve the country’s semiconductor product assembly, testing, and packaging. We expect the CHIPS Act to lead to more investments in higher value-added segments in the semiconductor supply chain. Moreover, it will also support the country’s efforts to explore and tap into natural reserves of green metals such as nickel, copper, and cobalt. We also see opportunities to strengthen and establish new ties through bilateral agreements, such as those with Qatar and Japan, to promote tourism investments and mutual visits.
We also expect the digital economy to continue expanding as the government enables businesses—particularly micro, small, and medium enterprises or MSMEs—to adapt to digitalization and leverage the rise of emerging technologies such as 5G, cloud computing, and artificial intelligence. To advance workforce development, the government will collaborate with the private sector to enhance the content of training programs for workers and employers. This initiative will integrate courses on cutting-edge productivity tools utilizing emerging technologies. The passage of the Konektadong Pinoy Bill will help reduce barriers to entry in the data transmission sector and upgrade physical and digital infrastructure to enable greater participation in the digital economy.
Despite limited fiscal space, government spending will continue to support growth by improving efficiency at all levels in delivering priority programs and projects. The government’s ongoing efforts to roll out the implementation of full devolution, along with efforts to strengthen the capacity of local government units, will facilitate the effective implementation of the Supreme Court ruling on the Mandanas-Garcia case. In addition, we need to improve collection efficiency by streamlining and digitalizing tax and customs administration. The Maharlika Investment Fund can be tapped as an additional funding source to facilitate investments in priority sectors.
Finally, we need to acknowledge the urgency of addressing the impact of climate change. Thus far, we have seen how an extended high heat index disrupted schooling, work, and the economy and even endangered the lives of the most vulnerable. The swift decision to revert to the old school calendar is a crucial step to protect the health of the students and teachers. However, much more needs to be done. It is important to develop an action plan to ensure the health and safety of all, especially the vulnerable; install the necessary cooling features in workspaces, schools, homes, and public spaces; adjust work schedules as necessary, but ensure business and service continuity.
Let me reiterate that the Economic Team has taken to heart the President’s directives by ensuring that the necessary policies are in place as we work toward realizing a Bagong Pilipinas. Our major decisions are always evidence-based and data-driven. Our goal is to facilitate massive investments in physical and human capital to create more and better jobs, improve our economy’s competitiveness, and, most importantly, reduce poverty to single-digit levels by 2028.
Despite various risks and challenges, the economic outlook for the Philippines in the near and medium term remains bright. With hard work and the right policies in place, we are confident that we will achieve our growth target of 6.0 to 7.0 percent this year. The Marcos Administration remains committed to achieving rapid, sustained, and inclusive economic growth, leading to a matatag, maginhawa, at panatag na buhay for all Filipinos.
Thank you, and good morning once again.
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