The Philippine economy will likely post a slower growth of 5.9 percent in 2023, compared to the 46-year high of 7.6 percent in 2022 amid weaker external demand, the ASEAN+3 Macroeconomic Research Office (AMRO) said Tuesday.
AMRO, an international organization that carries out macroeconomic surveillance in the ASEAN+3 region and is composed of the 10 members of ASEAN, along with China; Hong Kong, China; Japan; and Korea, recently conducted its annual consultation visit to the Philippines from Aug. 29 to Sept. 8, 2023. The AMRO team was led by group head and principal economist Runchana Pongsaparn.
AMRO director Kouqing Li and chief economist Hoe Ee Khor participated in the policy meetings and also met with Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., Deputy Governor Francisco Dakila Jr. and Department of Finance Undersecretary Maria Edita Tan.
The discussions focused on the risks and challenges facing the Philippines, and policy options to sustain the growth momentum, manage elevated inflationary pressures, restore fiscal buffers, and address long-term structural issues.
“[The] Philippines’ economic growth is projected to moderate to 5.9 percent in 2023 due to high base effects and weaker external demand, before edging up to 6.5 percent in 2024 as external demand recovers,” Pongsaparn said.
“Meanwhile, domestic demand is expected to remain robust supported by continued improvement in labor market conditions, lower inflation, robust overseas remittances, and higher government infrastructure spending,” Pongsaparn said.
The Philippine economy grew 4.3 percent in the second quarter of 2023 amid the uncertain global environment highlighted by elevated inflation and higher interest rates. This brought the first-half average to 5.3 percent, lower than the government’s target range of 6 percent to 7 percent.
Economic managers said to achieve at least the lower end of the target range, the economy should grow by 6.6 percent in the second half.