Citi Research trimmed its gross domestic product growth forecast on the Philippines for 2024 to 5.8%, from 6% previously. — Reuters
MANILA: Economic growth this year might fall short of President Marcos’ goal, Citi Research says as it turned less bullish on the country after the onslaught of recent typhoons that had weighed on output in the third quarter (3Q).
The American banking giant trimmed its gross domestic product (GDP) growth forecast on the Philippines for 2024 to 5.8%, from 6% previously, to take into account the “weaker-than-expected” expansion in the three months through September.
If Citi’s watered-down outlook comes to pass, GDP growth in 2024 will be slower than the 6% to 7% expansion that the Marcos administration is hoping to achieve this year.
Meanwhile, the bank kept its 2025 projection at 6% growth which, if realised, will settle below the 6.5% to 7.5% growth aspiration of the government for next year.
But Citi nevertheless believed that the slowdown in 3Q was not indicative of a broader economic weakness, arguing that the sluggish growth was mainly because of “several temporary, weather-related factors” that had hit key sectors like agriculture and construction.
“From the supply side, agriculture and construction had been the main drags, and this was partly due to the weather effects of El Nino during the planting season and at least seven typhoons during the harvest season,” said Citi economist Nalin Chutchotitham.
She added that classes and work suspensions because of the storms had also dragged other sectors like manufacturing and services.
“Nonetheless, we think it would be misleading to view the weaker 3Q expansion as the start of a slowdown as several negative factors in 3Q are one-off events,” Chutchotitham continued.
Latest data showed the Philippine economy grew at an annualised 5.2% in the three months through September, the weakest expansion in five quarters.
That growth was slower than the 6.4% expansion in the second quarter and was also below market expectations.
In the first nine months, GDP growth averaged 5.8%. The economy will have to grow by at least 6.5% in the final quarter of 2024 to meet the government’s target for the year.
Secretary Arsenio Balisacan of the National Economic and Development Authority said “we remain optimistic that this target is attainable”. — Philippine Daily Inquirer/ANN
