Recto: Gov’t might have missed 2024 growth target

MANILA, Philippines — Economic growth in 2024 might have fallen short of the Marcos administration’s target, Finance Secretary Ralph Recto said, no thanks to the powerful typhoons that hit the country late in the season last year.

Speaking to reporters, Recto said average gross domestic product (GDP) expansion last year likely settled below 6 percent, even as he had expected growth in the fourth quarter of 2024 to be faster than the preceding three months.

READ: PH targets 6-8% growth till 2028

Explaining his outlook, the finance chief said the storms that struck the country in late October until mid-November might have prevented the economy from squeezing out the needed level of growth to meet the official targets. This is despite the typical surge in economic activities ahead of the holiday season.

Recall that the Marcos administration had aimed for growth of 6 to 6.5 percent last year. For 2025, the government wants the economy to expand by 6 to 8 percent, a goal that, Recto said, is achievable.

“If it (growth) hits 6 [percent] in the fourth quarter, I'll be happy with that. I don't think it will hit 6 percent for 2024, but I think it will surpass 6 percent in 2025,” he said.

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.

Spending drag

As it is, the government is aspiring for above-6 percent growth while pursuing a fiscal consolidation program that may crimp state spending and its contribution to economic output. And this year, public sector expenditures would feel a lot more pressure.

In a separate interview with reporters, Budget Assistant Secretary Romeo Matthew Balanquit said disbursements might weaken in the first half of 2025 due to the scheduled ban on new spending during the election period.

At the same time, Balanquit said President Marcos’ decision to put P757-billion worth of items–which were introduced by Congress in the 2025 budget–on “conditional implementation” might slow down expenditures, as agencies would have to justify the release of such funds to prevent any misuse. Among them are funds for the controversial Ayuda sa Kapos ang Kita Program (AKAP).

“Releases would not be that big because of the P757 billion [for conditional implementation], which is around 11 to 12 percent of the total budget. So it’s a really big amount,” he said.

“Then you have the election [spending ban]. So maybe our expected spending would be lower in the first two quarters compared to 2024,” he added.

The Philippine Statistics Authority will release the fourth quarter and full-year 2024 GDP data on Jan. 30.

(2025/01/20-02:13)