Q1 2024: Philippine Economy Grows 5.7%, Impacts on Filipinos

In the first quarter of 2024, the Philippine economy grew 5.7%, less than the 5.9% growth that economists had predicted. Notwithstanding difficulties brought forth by ongoing high inflation and high interest rates, the growth rate in the January–March quarter was nevertheless better than the revised 5.5% growth in the last quarter of 2023.

Given the outside economic headwinds, the Philippine Statistics Authority said that the economy performed well in the first quarter. That gain, meanwhile, is less than the 6.4% increase seen in the same time frame the previous year.

BusinessWorld experts, who had earlier predicted somewhat higher growth, noted that several global economic factors, including fluctuating commodity pricing and geopolitical upheaval, affected economic activity in the Philippines.

Perhaps the central bank's persistence in maintaining high interest rates to control inflation limited more aggressive corporate investments and consumer spending. The pace of inflation, which has been affecting living expenses, is still a big concern for policymakers.

The industries' fortunes were varied; although manufacturing and services contributed significantly to GDP, agriculture's growth was sluggish because of bad weather and supply chain interruptions.

Citing projected gains in the state of the world economy and the completion of existing infrastructure projects that are expected to increase output and consumption, the administration is still upbeat about reaching its full-year economic growth objective.

How does this update impact the lives of Filipinos？

Though less than projected, the Philippines' 5.7% GDP growth in the first quarter of 2024 has several direct and indirect effects on Filipinos' lives. The following is a list of important ways that this economic performance affects people and families nationwide:

Jobs: The creation of jobs often follows economic expansion. Though the increase was less than expected, it nonetheless points to some degree of development in industries like manufacturing and services, which might result in additional job possibilities. If growth decelerates, the rate of job creation may be insufficient to eliminate underemployment and unemployment by a significant margin.

Cost of Living and Inflation: The Philippines' economy is growing, yet inflation is still rather high. The typical Filipino would find that their daily expenses for food, transportation, and utilities would rise, which would strain family finances. Rising interest rates will make borrowing money to combat inflation more expensive, which will be detrimental to households and might deter new investment.

Spending and consumer confidence: Spending by consumers influences economic growth. When growth either matches or exceeds expectations, spending may increase and confidence may as well. But should growth be insufficient, as it was in this instance, prudent spending may follow, which would impede the economic recovery even more.

Government Services & Spending: The state of the economy affects government incomes and its capacity to finance infrastructure projects and public services. Slowing down growth and maybe cutting down on government spending might affect vital public services like healthcare, education, and transportation.

Long-Term Economic Plans: Social programs and infrastructure expenditures are examples of long-term economic policies whose success by the government may impact its ability to meet its full-year economic goals. Should the slower-than-expected growth continue, objectives and budgetary policies could need to be adjusted.

While there is indication that the economy is expanding based on the overall growth rate, the sluggish pace and enduring challenges such as inflation and high interest rates could potentially diminish the advantages that Filipino citizens enjoy in their daily lives and prospects.