MANILA, Philippines — The Philippines has a low likelihood of achieving the end-of-plan (EOP) economic growth target of 6.5 to eight percent by 2028 set under the Philippine Development Plan (PDP), according to the Philippine Statistics Authority (PSA).
“The Philippine GDP (gross domestic product) slightly increased to 5.7 percent in 2024 from 5.5 percent in 2023. However, the Philippines remains slightly far from hitting its EOP target growth rate of 6.5 to eight percent,” the PSA said in its 2024 Statistical Indicators on Philippine Development report.
Through StatDev, the PSA tracks the progress and likelihood of achieving the government’s economic and social development goals and priorities outlined in the PDP 2023 to 2028, which serves as the country’s overall development blueprint.
The Philippine economy expanded at a slightly faster pace of 5.4 percent in the first quarter than the previous quarter’s 5.3 percent, but was slower than the 5.9 percent growth in the same period in 2024.
Earlier, the Department of Economy, Planning and Development said the first quarter economic performance reflected tempered economic activity amid persistent uncertainties caused by the planned reciprocal tariffs of the United States on trade partners.
Last month, the interagency Development Budget Coordination Committee trimmed its growth target for this year to 5.5 to 6.5 percent from six to eight percent, previously.
The government also revised the annual growth target for 2026 to 2028 to six to seven percent from the previous goal of six to eight percent.
University of Asia and the Pacific economist Victor Abola said during a forum organized by the Center for People Empowerment in Governance yesterday that the US reciprocal tariff imposed on Philippine exports could lead to a 0.5-percent to one-percent reduction in GDP growth.
The US is imposing a 20 percent tariff on Philippine goods starting Aug. 1, higher than the 17-percent tariff announced in April.
A Philippine delegation is in the US to negotiate for the reduction in the tariff.
While inflation is no longer a threat to growth, Abola said the growth in imports from China to the Philippines has become a bigger concern.
“The imports from China will grow because it cannot enter the US. So if we import more, our deficits will be larger. And that means slower GDP growth and unemployment,” Abola said.
According to Abola, the country needs to closely watch domestic demand, which is driving the Philippine economy.
While the PSA report showed a low likelihood of achieving the GDP EOP target under the PDP, the chances of achieving targets on food inflation, headline inflation, unemployment rate, percentage of salary workers in private establishments, poverty incidence and the innovation ranking is high.
As food inflation eased to 4.5 percent in 2024 from eight percent in 2023, the PSA said the downward trend indicates a high chance of achieving the EOP target of 2.4 to four percent.
In terms of headline inflation, which eased to 3.2 percent in 2024 from six percent in 2023, the PSA said the EOP target range of 2.4 to four percent has already been achieved.
The unemployment rate dropped to 3.8 percent in 2024 from 4.4 percent in 2023, surpassing the lower limit of the EOP target of four to five percent.
When it comes to the percentage of wage and salary workers in private establishments, the rate rose to 50.9 percent in 2024 from 49.9 percent in 2023.
“With this improvement, it shows high likelihood of achieving the EOP target of 53 to 55 percent,” the PSA said.
The PSA said the latest report on poverty incidence at 15.5 percent in 2023, also indicates a high likelihood of attaining the EOP goal of 8.8 to nine percent.
As the Philippines moved up to 53rd place out of 133 economies in the 2024 Global Innovation Index from the 56th spot in 2023, the PSA said the country’s strong innovation capabilities are expected to contribute to a high likelihood of achieving the 43rd spot as the EOP target.