The Philippine economy expanded by 6.3% in the second quarter of 2024, surpassing government targets and aligning with Moody's Analytics' estimates.
Data from the Philippine Statistics Authority (PSA) revealed that the country's Gross Domestic Product (GDP) grew by 6.3% year-on-year in Q2 2024, with construction emerging as the main growth driver.
"The main contributors to the second quarter 2024 growth were: Construction, 16.0%; Wholesale and retail trade; repair of motor vehicles and motorcycles, 5.8%; and Financial and insurance activities, 8.2%," the PSA reported on Thursday.
Among the major economic sectors, Industry and Services posted year-on-year growth rates of 7.7% and 6.8%, respectively. In contrast, the Agriculture, forestry, and fishing sector experienced a year-on-year decline of 2.3%.
On the demand side, Household Final Consumption Expenditure was the top contributor to the GDP increase, growing by 4.6% in Q2 2024. Other expenditure items that recorded year-on-year growth include 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 Gross National Income grew by 7.9% year-on-year in Q2 2024, while Net Primary Income from the Rest of the World increased by 24.7%.
Earlier this week, Moody's Analytics, in its Weekly Highlights and Review, anticipated the Philippine economy to accelerate to 6.3% year-on-year in Q2, up from 5.7% in the first quarter of 2024.
"Two countries will post June-quarter GDP during the week. In the Philippines, we expect economic growth to accelerate to 6.3% year-on-year from 5.7% in the March quarter. The result will be flattered by a low base effect. A year earlier, growth slowed substantially to 4.3%, and in quarter-on-quarter terms, GDP went backward," the report stated.
Moody's Analytics attributed the solid economic growth to robust goods exports and increased government spending. However, the report noted that private consumption and investment growth may remain subdued due to high borrowing costs impacting budgets. Additionally, a slower increase in tourist arrivals could potentially diminish the shine of service exports.
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