The Philippine Institute for Development Studies (PIDS) forecasts that the country’s economy will grow between 5.8% and 6% in 2024, an improvement from last year. This growth is anticipated to be fueled by strong government spending and domestic consumption, as highlighted in the PIDS discussion paper, “Macroeconomic Prospects of the Philippines in 2024-2025: Toward Upper Middle-Income Status.”
For the final quarter of this year, PIDS projects a 6% GDP growth, building on the 5.8% average growth recorded from January to September. To meet the government’s annual target of 6-7% growth, at least a 6.5% increase in GDP is needed in the fourth quarter, according to Arsenio Balisacan, National Economic and Development Authority Secretary.
Key drivers of this growth include infrastructure projects and lower inflation, which will encourage borrowing, boost business activities, and strengthen household consumption. While the Bangko Sentral ng Pilipinas has begun easing policy rates, PIDS notes that the full impact may take four to seven quarters to manifest.
Looking ahead to 2025, PIDS predicts a GDP growth rate of 6.1%, slightly below the government’s 6.5-7.5% target. The forecast is supported by expected improvements in inflation rates, policy adjustments, remittances, and upcoming election-related spending. However, risks such as global economic uncertainties, domestic challenges, and natural disasters may impact the outlook.
Achieving upper middle-income status by 2025 remains challenging, with PIDS emphasizing the need for sustained GDP growth of at least 6-7% and increased per capita GNI. The Philippine Statistics Authority forecasts a declining population growth rate, which, if paired with robust economic performance, could support per capita income growth.
