Standard Chartered Bank said Friday it expects a softer growth for the Philippines in the second half of the 2023, but said the country would remain one of the fastest-growing in the region.
Jonathan Koh, Standard Chartered economist for Asia, maintained his gross domestic product growth forecast of 5.3 percent in 2023 despite a strong 6.4-percent expansion in the first quarter.
“The first-quarter GDP is strong, but growth has been slowing sequentially. Growth in the second half will be soft,” Koh said in an online briefing.
Koh said the labor market was quite strong, although the pent-up demand would continue to normalize for the rest of the year. “The pace of consumption will remain on the softer side going forward,” he said.
Koh said two of the bright spots for the Philippine economy are the continuous recovery of the tourism sector that was hit hard by the global pandemic and the sustained inflows of remittances from overseas Filipino workers.
“In terms of support to GDP, tourism is one,” he said, adding that a post-COVID recovery for the sector was fast, which would be good for the current account.
“Remittances will remain stable and will continue growing by 3 percent that will support consumption,” he said.
The International Monetary Fund earlier raised its 2023 growth forecast for the Philippines to 6.2 from 6.0. The projection was within the 6 percent to 7 percent growth forecast announced by the interagency Development Budget Coordinating Committee.
The IMF, however, revised downward its growth forecast for 2024 to 5.5 percent from 5.8 percent amid the global headwinds and lagged effects of policy tightening.
The Philippine economy grew by a 46-year high of 7.6 percent in 2022 on the back of reinvigorated economic activity due to the reopening of the economy to greater normalcy.
GDP grew by 6.4 percent in the first quarter of 2023, one of the fastest in Asia.
The DBCC maintained its growth assumption of 6.5 percent to 8 percent for 2024 to 2028.