Economic growth slowed to 5.2%

SUBDUED household and government consumption slowed economic growth to 5.2 percent in the third quarter of 2024, the Philippine Statistics Authority (PSA) said on Thursday.The result was markedly down from the revised 6.4 percent in the previous three months and the 6.0 percent posted in the same quarter in 2023. It was also lower than the 5.7 percent median in a Manila Times poll of economists.The third quarter gross domestic product result was the lowest since the economy managed to grow 4.3 percent in second quarter of 2023.The year-to-date growth rate of 5.8 percent was below the 6.0 to 7.0 percent target of the government for the year.Socioeconomic Planning Secretary Arsenio Balisacan said the country needs to grow at least 6.5 percent in the last three months of the year to hit the government's lower-end growth target. Drivers of growth The main contributors to the growth, the PSA said, were wholesale and retail trade (5.2 percent), repair of motor vehicles and motorcycles (5.2 percent), financial and insurance activities (8.8 percent) and construction (9.0 percent).The industry and services sectors posted year-on-year growth in the third quarter of 5.0 percent and 6.3 percent, respectively.On the other hand, a dry spell and destructive storms accounted for a 2.8 percent decline in agriculture, forestry and fishing."The crops subsector of the agriculture sector posted a year-on-year decline of 2.8 percent, reflecting the impacts of the El Niño phenomenon during the planting season and the effects of seven typhoons, in addition to the habagat, during the harvest season," Balisacan said."Fishing and aquaculture also declined due to the 29-day fishing ban in Cavite and Bataan amid an oil spill in July and the cancellation of fishing trips due to bad weather. Livestock production decreased due to the recent outbreaks of African swine fever, which hit Batangas last August," he added.During the July to September period, household final consumption expenditure remained muted at 5.1 percent in the third quarter of 2024.Government final consumption expenditure, meanwhile, dropped to 5.0 percent from the previous quarter's 10.7 percent.Gross capital formation and imports of goods and services grew by 13.1 percent and 6.4 percent, respectively. However, the exports of goods and services declined to 1.0 percent.During the same period, gross national income expanded by 6.8 percent, down from the previous period of 7.9 percent. The net primary income from the rest of the world slumped to 19.3 percent from 24.7 percent in April to June period. Growth targets to be retained Despite the third quarter slowdown, Balisacan said that they are still optimistic about hitting at least the lower-end of the government's growth target."We anticipate increases in holiday spending, more stable commodity prices (given low inflation), lower interest rates, and a robust labor market. In the areas affected by typhoons, recovery efforts will drive economic activity and, hopefully, build back better," Balisacan said.Budget Secretary Amenah Pangandaman previously stated that they might have a special Development Budget Coordination Committee meeting this month to revisit the growth targets of the government following the better-than-expected second quarter growth.However, with the recent developments, Balisacan said they might retain the growth target for this year."If all of us share the view that 6.5 for the fourth quarter is doable, then there's no reason to change [the target]," Balisacan said.