The International Monetary Fund and the research unit of Fitch Solutions expect the Philippine economy to post a stronger growth in 2024, after logging a 5.6-percent expansion in 2023.
The IMF, in its January 2024 World Economic Outlook (WEO) update, revised its 2024 gross domestic product (GDP) growth forecast for the Philippines to 6 percent from its 5.9-percent estimate in October.
“We expect growth in Philippines to bottom out in 2023 before bouncing back to 6.0 percent in 2024. A real GDP growth projection for 2024 was revised up slightly from the October WEO forecast of 5.9 percent, reflecting somewhat stronger-than-expected recovery in investment and exports,” Akihiko Yoshida, director of the IMF Regional Office for Asia and the Pacific, said in an online news briefing.
Yoshida cautioned that while the outlook for the Philippine economy is favorable, risks to near-term growth remain tilted to the downside, with persistently high inflation being a primary concern.
Meanwhile, BMI, a Fitch Solutions company, said the country’s 5.6 percent economic growth last year reflected the resilience of the Philippine economy, and this momentum would continue going into the new year.
“2024 looks set to be another strong year, and we forecast real GDP growth to accelerate to 6.2 percent,” BMI said.
BMI said, however, the government’s target range of 6.5 percent to 7.5 percent might be too optimistic.
“With tight monetary policy and likely fiscal pullbacks weighing on global demand, we think that the government’s official growth projections of 6.5 percent to 7.5 percent in 2024 might prove a tad too optimistic,” BMI said.
BMI said it expects the global growth to slow further fro m 2.5 percent in 2023 to 2.1 percent in 2024, as a turnaround in trading activity is unlikely to materialize.
The IMF said it expects the Philippine economy to grow 6.1 percent in 2025.
The economy grew by 5.6 percent last year, lower than the government’s target range of 6 percent to 7 percent.
Secretary Arsenio Balisacan of the National Economic and Development Authority (NEDA) noted that while the 2023 growth fell below target, the Philippines continues to be one of the top-performing economies in Asia.
“More importantly, our full-year GDP for 2023 is now 8.6 percent higher than pre-pandemic levels. Moreover, the Q4 economic performance validates the strategies and policy directions outlined in the Philippine Development Plan 2023-2028,” he said.
Finance Secretary Ralph Recto attributed the strength in domestic demand to increased household consumption and investments, particularly in public infrastructure.
Recto said the robust household consumption reflected strong spending, supported by a healthy job market, consistent inflows of remittances from overseas Filipinos and a surge in demand for goods and services.
“The strong economic performance in 2023 is a clear testament to the government’s efforts in creating an environment conducive to enhancing the purchasing power of Filipinos. We are firm in our commitment to ensure that our economic progress is felt in the day-to-day lives of our people,” Recto said.