THE Philippine economy will likely grow by 6 percent in the third quarter of 2024 on the back of increased household consumption, according to Finance Secretary Ralph G. Recto.
At the sidelines of the Asia CEO Awards on Tuesday night, Recto told reporters that the country’s gross domestic product (GDP) could settle at 6 percent after inflation declined in September 2024.
“I’m still hoping [for] 6 percent more so that inflation is declining,” Recto said. The country’s inflation rate settled at 1.9 percent in September 2024, the lowest since May 2020.
The 6-percent growth projection by the Finance chief is within the Development Budget and Coordination Committee’s (DBCC) target of 6 to 7 percent for 2024.
However, this is lower than the faster-than-expected 6.3-percent GDP posted in the second quarter of 2024 though slightly better than the 5.9 percent GDP recorded in the third quarter of 2023. Recto said economic growth in the third quarter of 2024 will be mostly driven by household consumption, which accounts for 75 percent of the GDP.
“For as long as [household final consumption expenditure] grows 6 percent, I think [the economy] will grow by 6 percent,” Recto added.
Infra spending
BUDGET Secretary Amenah F. Pangandaman said on Wednesday the P1.510- trillion budget allocation for infrastructure outlays in the 2024 national budget will help attain the country’s growth targets.
“This is consistent with our Medium Term Fiscal Framework to achieve our growth targets, and is well within the National Government’s target for infrastructure spending at 5 to 6 percent of GDP,” Pangandaman said in a statement.
‘No need to adjust targets’
EARLIER, Pangandaman, who also serves as chairperson of the DBCC, said the economic team might revise upward its growth targets by holding an off-cycle DBCC meeting in the third quarter of the year. (See: www.businessmirror.com.ph/2024/10/08/dbcc-revising-targets-as-inflation-improves/)
Recto agrees with Pangandaman in holding a DBCC meeting, not in the third quarter but in December instead. The DBCC conducts regular meetings in the first, second and fourth quarters of the year. In the fourth quarter of the year, the DBCC meeting is usually held in December.
The meeting, Recto said, is “not really to adjust but just to review” the economic team’s macroeconomic assumptions and fiscal targets.
As for the country’s fiscal targets, such as the government’s revenue collection and spending and budget deficit, Recto said there is no need to adjust these this year.
“I think these are manageable this year,” Recto added.
If ever there would be adjustments in the government’s targets, it would be all for next year instead.
“We have to take a look at what’s happening also globally. We have to prepare just in case there are more tensions in the Middle East,” Recto said.
