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GDP Update: Government spending propels Philippines’ GDP to 6.3%
Despite robust GDP growth in the 2nd quarter of 2024, the BSP will proceed with caution at next week’s policy rate meeting.
By Metrobank Research
With the 6.3% GDP growth in the 2nd quarter of 2024, the Philippines remains as one of the fastest-growing emerging economies in Asia, lagging only behind Vietnam (6.9%) and outperforming Malaysia (5.8%), Indonesia (5.0%) and China (4.7%).
Despite the higher-than-expected GDP growth, private consumption still remains constrained as household spending on essential items remain flat at less than 1% growth for the sixth consecutive quarter. However, both consumer and investment spending are expected to recover and pick up their pace in the second half of the year, supported by improved liquidity and credit environment, as the BSP begins its monetary easing. Inflation is also expected to ease in the coming months.
Following the higher-than-expected 6.3% GDP growth in the second quarter and the upward revision in the first quarter growth to 5.8% from the previous estimate of 5.7%, we have nudged up our full-year growth forecast to 5.8% from the previous 5.7%.
Download our Q2 2024 GDP report for in-depth analysis and insights.
No green light but BSP to proceed with caution at next week’s meeting
Despite the higher-than-expected GDP growth, private consumption remains constrained.
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