Manila, Philippines – The Philippine economy is projected to maintain its robust growth trajectory despite challenges like high inflation and weaker external demand, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
According to Philippines News Agency, In its 2023 Annual Consultation Report on the Philippines published on Monday, AMRO noted the sustained robust growth momentum of the Philippine economy in the first three quarters of 2023, following a significant rise in 2022. The country's gross domestic product (GDP) grew by 5.9 percent in the third quarter, bringing the year-to-date economic growth to 5.5 percent. Despite weaker external demand, growth is expected to continue, supported by resilient household consumption, an improving labor market, lower inflation, robust overseas remittances, and increased government infrastructure spending. AMRO forecasts the Philippine economy to moderate to 5.6 percent in 2023 due to high base effects and weaker external demand, but it anticipates a rise to 6.3 percent in 2024 as external demand recovers. However, inflation is projected to remain high, driven by demand and supply shocks, with headline inflation expected to reach 6.0 percent in 2023 before moderating to 3.6 percent in 2024. AMRO cited high core inflation, a positive output gap, and the second-round effects of minimum wage increases and high inflation expectations as contributing factors. The report also acknowledges the Philippine authorities' efforts in addressing inflation through monetary and fiscal policy tightening and targeted subsidies for vulnerable sectors.
