Finance Secretary Benjamin Diokno said over the weekend the Philippines will remain one of the most resilient economies in the region despite the global outlook downgrades expected by the World Bank and the Asian Development Bank.
“I think the general sentiment, based on our conversation with the World Bank, is there will be downgrades globally. But the good news is that the Philippines will remain to be the fastest growing in this part of the world,” Diokno said
“We can beat China.. We can beat Vietnam…. While there are downgrades, we can still grow faster than our neighbors,” he said.
Diokno said the slowdown in China could affect many countries, especially if they depended more on the world’s second-largest economy. He said that in comparison, the Philippines’ growth was mostly domestic demand driven in the past several years.
Diokno said the interagency Development Budget Coordinating Committee would meet later this month to review the first-half performance of the economy, with the gross domestic product expanding 5.3 percent, below the target range of 6 percent to 7 percent for the whole year.
“We will see if there is a need to change the assumptions… and there are some changes from ADB and World Bank. There is also a team from the IMF [International Monetary Fund] coming,” said Diokno.
Economists from First Metro Investment Corp. and University of Asia and the Pacific said in a joint report the Philippine economy might miss the growth target this year amid global headwinds.
They said the GDP in the third quarter might grow by 5 percent to 5.2 percent. While it would be faster than 4.3 percent in the second quarter, the third-quarter figure would not be enough to attain the lower end of the full-year target range.
Economists said the elevated national government spending in the third quarter should provide stimulus, and employment and consumer spending were expected to pick up starting September. They said the industry sector expansion would be broad-based, with manufacturing taking the lead.
They said the services sector should see domestic and foreign tourism drive trade, transportation and storage, accommodations and food services in September.
The second-quarter GDP growth slowed to 4.3 percent from 7.5 percent in the same period last year, weighed down by global slowdown because of elevated inflation and higher interest rates. This brought the first-half average to 5.3 percent, lower than the target range.
Oxford Economics said earlier the economy felt the impact of monetary tightening done by the Bangko Sentral ng Pilipinas to rein in inflation.
The economy grew by a 46-year high of 7.6 percent in 2022 with the reopening of the economy to greater normalcy.