The Philippine economy in terms of gross domestic product (GDP) grew by 5.7% in the first quarter of this year, or lower than the 6.4% registered in the same period last year.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the 5.7% GDP growth figure for the first quarter demonstrates that the Philippine economy is resilient and continues to grow despite the domestic and external headwinds.

“Despite our challenges on both domestic and international fronts, our economy continues to demonstrate remarkable resilience and growth. This performance retains the country’s position as a leading force among Asia’s emerging economies,” he said.

Balisacan said the first quarter Philippine growth rate is about the same as Vietnam’s, and surpassed other major economies such as China at 5.3%, Indonesia at 5.1%, and Malaysia at 3.9%.

However, the latest GDP growth figure is lower than the target range of 6.0% to 7.0% set by the inter-agency Development Budget Coordination Committee (DBCC). Earlier this year, the DBCC adjusted downward its GDP growth target for 2024 from the previous 6.5% to 7.5%, taking into account factors such as global demand, trade growth, oil prices, and inflation trends.

National Statistician Claire Dennis Mapa said that among the contributors to growth include the financial and insurance activities at 10.0%, wholesale and retail trade and the repair of motor vehicles and motorcycles at 6.4%, and manufacturing at 4.5%.

Also, agriculture, forestry, and fishing (AFF) went up by 0.4%, industry with 0.4%, and services with 6.9%.

However, household final consumption expenditure and government final consumption expenditure posted lower growth rates at 4.6% and 1.7%from a year ago’s 6.4% and 6.2%.

Balisacan said the slowdown in household spending was due to the elevated prices of major food items and the effects of current El Nino.

“Meanwhile, government spending also slowed down, primarily due to the sliding of a large amount of expenditure to April this year, whereas the government made such spending in March last year,” he said.

Balisacan is optimistic that despite the risks to growth, the 6% to 7% economic growth will be attained this year.

“Despite various risks and challenges, the economic outlook for the Philippines in the near and medium term remains bright. With hard work and the right policies in place, we are confident that we will achieve our growth target of 6% to 7% this year. The Marcos administration remains committed to achieving rapid, sustained, and inclusive economic growth, leading to a  matatag, maginhawa, at panatag na buhay for all Filipinos,” he said.

EL NINO EFFECT

Balisacan said the government has put mitigation efforts to soften the impact of the El Nino.

He said given the extreme weather conditions and climate change, the government needs to invest more in research and innovation to enable the agriculture and food systems to cope with the challenge.

Aside from adjustments in planting calendars, he said the government is using strategic trade policies to augment domestic production and establish mechanisms to empower consumers to combat inflation.

“We will continue to implement a whole-of-government approach to alleviate the impact of El Niño while preparing for La Niña. We are collaborating with distribution utilities to manage the increasing electricity demand and working with private water concessionaires to address leaks and wastage, ensuring water security,” Balisacan said.

He also cited the need to build effective irrigation, drainage, and flood control systems.

Balisacan also said the government acknowledges the urgency of addressing the impact of climate change.

“The swift decision to revert to the old school calendar is a crucial step to protect the health of the students and teachers. However, much more needs to be done,” he said.

“It is important to develop an action plan to ensure the health and safety of all, especially the vulnerable; install the necessary cooling features in workspaces, schools, homes, and public spaces; adjust work schedules as necessary, but ensure business and service continuity,” he added.