Economy Resilient But Faces Risks to Future Growth

Despite weather events like typhoons hitting the country this year, the Philippine economy has remained strong and continues to be one of the fastest-growing economies in the region.

- By Louella Desiderio

While the government believes that the growth goal for this year could be achieved, weather disturbances and uncertainties in the global environment, including proposed policies by US president-elect Donald Trump, are seen posing risks to future growth.

National Economic and Development Authority Secretary Arsenio Balisacan said the economy has shown "remarkable resilience this year," noting the 5.8 percent average gross domestic product (GDP) growth posted in the January to September period. This was despite significant weather-related disturbances or disruptions throughout the year.

He said volatile climate patterns have adversely affected agriculture, movement of goods, and overall economic activity in affected areas.

"Notwithstanding these disruptions, our growth rate still positions us as one of the fastest-growing economies in Asia," Balisacan said.

In the third quarter alone, economic growth slowed to 5.2 percent from the previous quarter's 6.4 percent expansion and six percent growth in the third quarter of last year as typhoons destroyed crops and disrupted economic activity.

At its meeting earlier this month, the interagency Development Budget Coordination Committee (DBCC), which reviews and approves the government's macroeconomic assumptions, adjusted economic growth targets for this year until 2028 to take into account emerging domestic and external developments.

For this year, the government revised the growth target to six to 6.5 percent from six to seven percent, previously.

Even as the economy faced domestic challenges like unfavorable weather events, the DBCC said it is optimistic that the economy can still attain the growth target for the year.

The government expects the Philippine economy to bounce back in the fourth quarter, citing the anticipated increase in holiday spending, continued disaster recovery efforts, low inflation, as well as the robust labor market.