The Philippines will defy the expected global economic slowdown and grow faster than its peers in the Asian region, the Department of Finance said Monday.
Finance Secretary Benjamin Diokno said the upbeat outlook this year, defying the cautious 2.9-percent global growth forecast by multilateral institutions, cements the Philippines’ position as one of the region’s fastest-growing economies.
“The Philippine economy has performed well despite a challenging economic and financial environment in 2023 beset by ongoing geopolitical tensions, imposition of trade restrictions, and extreme weather events resulting in high domestic commodity prices, especially for rice and fuel,” Diokno said.
“At the same time, we are forging for an even better outlook for 2024,” he said.
Diokno said that the Department of Budget and Coordination Committee (DBCC) assumed a growth rate of 6.5 percent to 7.5 percent this year.
“Amid the ongoing strong El Niño and geopolitical and trade tensions, the country’s growth is expected to be driven by strong private consumption, supported by the expected return of inflation within the target range, falling oil prices, robust public spending, greater investments lured by the country’s sound macroeconomic fundamentals, investment-grade credit rating, and the implementation of structural reforms, and increased demand for Philippine exports as supply chain bottlenecks ease,” he said.
Diokno said that in 2023, the Philippine economy likely grew close to the low end of the 6 percent to 7 percent growth target despite a difficult global environment and domestic challenges.
The Philippine economy, as measured by gross domestic product (GDP), grew by 5.5 percent in the first three quarters of 2023––the fastest among major Asian economies such as China (5.2 percent), Indonesia (5.1 percent), Vietnam (4.2 percent), Malaysia (3.9 percent), Thailand (2.0 percent) and Singapore (0.5 percent).
Diokno said inflation was also decelerating despite price pressure being a global issue in 2023.
“This proves the effectiveness of aligned monetary and fiscal policies as well as the efficacy of direct measures to augment domestic supply, address logistical bottlenecks, and arrest uncompetitive practices in key commodity markets,” he said.
Inflation settled at 3.9 percent in December 2023, down from 4.1 percent in November and 8.1 percent a year ago.
Inflation averaged 6 percent in 2023, aligned with the revised 6.0 percent inflation assumption of the DBCC for the year.