The National Economic and Development Authority (NEDA) is optimistic that the lower end of the government’s economic growth target for 2024 and 2025 will still be attained despite headwinds.

“In the face of many domestic and international challenges, we’ve effectively implemented the appropriate strategies to sustain the economy’s forward momentum,” NEDA Secretary Arsenio Balisacan said in a year-end briefing on Wednesday held at the Wynwood Hotel in Ortigas.

For the first three quarters of the year, the Philippine economy grew by 5.5 percent which is one of the highest growths in the region.

“While this falls below our target of 6 to 7 percent growth for the year, we are confident that we can still reach this lower end of the target, or at the very least, it is a figure near the lower end of the range,” Balisacan said.

Balisacan said he is “quite positive” about the economic growth in the fourth quarter of the year, as inflation already eased near the upper end of the government’s 2 to 4 percent target.

From 2024 to 2028, the government is aiming to attain a 6.5 to 8 percent economic growth target.

However, Balisacan said that for 2024, the higher end of the growth target may not be reached.

“I would not this early give away the 6.5 [percent] target, but 8 [percent] may be out of [the question]… reducing the range is one proposal, but we’ll see once we get all the information,” Balisacan said.

“I do think that 6.5 percent is very reasonable. But for the medium-term, I will stick to this [6.5 to 8 percent] scenario. The reality is next year, of course, all the major multilateral agencies are seeing that the global economy is not as expansive as they initially expected and for us to also ignore that is not good,” he added.

Balisacan said growth will mainly be driven by the services sector.

“The economy is very much dependent on… it is dominated by services. About two-thirds of the economic growth comes from the growth of that sector. With the complete opening of the economy, you would expect growth to continue there, to be driven by the services sector,” he said.

Balisacan said the information technology-business process management (IT-BPM) and construction sectors are also expected to boost growth.

On the demand side, Balisacan said household final consumption will also be a major driver of growth.

In a separate statement, the Asian Development Bank (ADB) said it also believes that the Philippine economy will continue to post high growth.

In its Asian Development Outlook (ADO) December 2023 report, the ADB maintained its 2023 and 2024 Philippine economic growth forecast of 5.7 percent and 6.2 percent.

The ADB said the growth projection was maintained as the country “showed robust growth in the first nine months of 2023.”

It added the growth momentum is expected to continue despite tighter financial conditions. (PNA)