Proving its resilience, the Philippine economy in terms of gross domestic product (GDP) grew by 6.3% in the second quarter of 2024, beating the expectations of analysts who generally saw a 6% increase for the period.

The latest GDP growth figure is higher than the adjusted 5.8% increase for the first quarter of this year, and much higher than the 4.3% of the same period last year. It is also within the 6% to 7% growth target set by the Development Budget Coordination Committee (DBCC).

Notably, the Philippine economy had to deal with external headwinds like slower global economic growth, and trade disruptions caused by ongoing geopolitical conflicts and tensions. Meanwhile, the internal headwinds included slightly elevated inflation and the El Nino weather disturbance, among others.

According to the Philippine Statistics Authority (PSA), the main contributors to the second quarter 2024 growth were: Construction with 16% increase; wholesale and retail trade, repair of motor vehicles and motorcycles, 5.8%; and financial and insurance activities, 8.2%.

The PSA said the except for agriculture, the services and industry sectors posted uptrends.

“Among the major economic sectors, industry and services posted year-on-year growths in the second quarter of 2024 with 7.7% and 6.8%, respectively. Meanwhile, the agriculture, forestry, and fishing sector posted a year-on-year decline of 2.3%,” the PSA said.

Household consumption remained the top driver of the country’s economic growth.

“On the demand side, household final consumption expenditure was the top contributor to the increase in country’s GDP, which grew year-on-year by 4.6% in the second quarter of 2024. The following expenditure items also recorded year-on-year growths: Government final consumption Expenditure, 10.7%; Gross capital formation, 11.5%; Exports of goods and services, 4.2%; and Imports of goods and services, 5.2%,” the PSA said.

Meanwhile, the Gross National Income grew year-on-year by 7.9 percent in the second quarter of 2024. Likewise, Net Primary Income from the Rest of the World grew by 24.7 percent during the period.

With the 6.3% GDP growth figure for the second quarter, the Philippine economy will likely hit projections it will grow by 6% or above this year.

To recall, the DBCC on April 4 adjusted its economic growth targets for 2024 and 2025 due to current domestic and global developments. Specifically, the DBCC revised downward its GDP outlook for 2024 to 6% to 7% from the previous range of 6.5% to 7.5%.

For 2025, the DBCC narrowed the GDP target to 6.5% to 7.5% from the previous 6.5% to 8%.

(Graph from PSA)