MANILA (Reuters) – The Philippine economy is expected to grow more slowly than first thought this year after the country was hit by a series of typhoons but should be more robust in 2025 and 2026, the World Bank said on Tuesday.
Gross domestic product (GDP) will expand by 5.9% in 2024, slightly less than an earlier 6.0% outlook, after bad weather in the third quarter, the bank said in its Philippines Economic Update.
“The country remains vulnerable to extreme weather events such as typhoons and heavy monsoon rains,” Zafer Mustafaoglu, World Bank country director for the Philippines, Malaysia, and Brunei Darussalam, said in a statement.
GDP will accelerate to 6.1% in 2025 and 6.0% in 2026, it added.
The projections were all at the lower end of the government’s recently-reduced target of 6.0% to 6.5% for 2024, and 6.0% to 8.0% in each of the next two years.
GDP slowed to 5.2% in the July to September period, its weakest in more than a year, as adverse weather disrupted government spending and dampened farm output. Growth in the first nine months of 2024 was 5.8%.
Growth in the Philippines hinges on containing inflation, which will allow the central bank to maintain a more supportive monetary policy to support business activity, the bank said.
It said the country could also benefit from a “demographic dividend”.
The Philippines has a population of more than 110 million with a median age of 25.3 years old as of 2020, according to government data.
It is one of the few nations in the region that can potentially achieve prosperity before its population ages significantly, the bank said.