Philippines GDP Growth Slows to 5.9% in 2024 Due to Typhoons, Says World Bank

Typhoons slowed down both agriculture and government spending, cutting GDP growth to 5.2%.

By Thea Felicity

Dec 11 2024, 10:12 AM EST

PHILIPPINES-US-DIPLOMACY-DEFENCE — US Secretary of Defense Lloyd Austin (2nd R) meets with Philippine President Ferdinand Marcos during a courtesy call at the Malacanang Palace in Manila on November 18, 2024. US and Philippine defence chiefs signed an agreement November 18 on sharing classified military information and technology, as the long-time treaty allies deepen cooperation in a bid to counter Chinese influence in the region. GERARD CARREON/POOL/AFP via Getty Images

The Philippines were seeing a strong GDP in the first few months of the year, until a string of typhoons crippled some of its significant sectors. Now, the World Bank has downgraded the 2024 growth forecast for the country to only 5.9% instead.

To compare, the Philippines currently projects to reach 6.0%-6.5% growth for 2024. This all changed when the third quarter encountered extremely adverse weather conditions that pounded hard on agricultural output and hindered government spending. GDP growth went down during that quarter to 5.2%.

Regardless, Reuters reported that the World Bank sees hope for the future of the Philippine GPD with a projected rise to 6.1% in 2025, with 6.0% being sustained in the following year, 2026. It's worth noting, however, that these figures fall at the lower end of the targets of the Philippine government.

Philippine GDP Affected by Typhoons

In the country, extreme weather events like typhoons and heavy monsoon rains are not new, even in the way they affect its GDP. In fact, it has often disrupted agricultural and industrial activities over the years. Zafer Mustafaoglu, country director of the World Bank for the Philippines, Malaysia, and Brunei, says it will be important to address the vulnerabilities to ensure long-term growth. Inflation control is also important since a stable economic environment provides for supportive monetary policies that can help improve business activity.

But the decline is not going to be transferred in the following years. The World Bank shared that there is an advantage to be taken from the Philippines' youthful population, according to an earlier report by The Inquirer. With over 110 million people and a median age of just 25.3 years, the country could benefit from a "demographic dividend." This means that a large, working-age population has the potential to drive economic growth if paired with job opportunities and education.

The growth in the Philippines may be slower as it progresses towards 2024; however, the recent World Bank report still shows promising recovery prospects in the future. Stronger and adequate policies to eradicate inflation, raise expenditure, and maximize its youths will give a boost towards the achievement of sustained prosperity for the country.