Philippines Economic Forecast

Philippines Economic Outlook

May 26, 2020

GDP contracted for the first time since 1998 in the first quarter, hit by disruptions from the Taal Volcano eruption in January, the Covid-19 pandemic and subsequent lockdown put in place in March. Moreover, the economy is expected to have worsened further at the start of the second quarter due to the lockdown and a sudden downturn in the global economy. The manufacturing PMI hit a new record low in April on plummeting production, new orders and exports, while tourism plunged over 50% in January–April. In addition, the government stated in May that around 42,000 overseas Filipino workers are set to return in May and June, joining the over 27,000 who have already returned as economic fallout from Covid-19 disrupts jobs overseas. The migration will likely see remittances—an economic lifeline for the country—plunge in the second quarter and possibly beyond.

Philippines Economic Growth

After eight years of above 6.0% growth, the economy is seen contracting this year. Disruptions from Covid-19 containment measures, evaporated tourism and plunging remittances will all pummel GDP. While higher government spending and investment should provide some relief, private investment is seen falling on soft demand and high uncertainty. FocusEconomics panelists see GDP falling 2.3% in 2020, which is down 3.7 percentage points from last month's forecast. Next year, GDP is seen growing 7.5% in 2021.

Philippines Economy Data

2014 2015 2016 2017 2018
Population (million)99.9102103105107
GDP per capita (USD)2,8492,8812,9532,9893,104
GDP (USD bn)285293305314331
Economic Growth (GDP, annual variation in %)6.16.16.96.76.2
Consumption (annual variation in %)5.66.37.15.95.6
Investment (annual variation in %)7.216.926.19.412.9
Manufacturing (annual variation in %)8.35.77.18.44.9
Retail Sales (annual variation in %)2.7-57.310249.012.4
Unemployment Rate6.86.35.55.75.3
Fiscal Balance (% of GDP)-0.6-0.9-2.4-2.2-3.2
Public Debt (% of GDP)45.444.742.142.141.8
Money (annual variation in %)10.59.113.311.68.6
Inflation Rate (CPI, annual variation in %, eop)1.90.72.22.95.1
Inflation Rate (CPI, annual variation in %)3.60.71.32.95.2
Inflation (PPI, annual variation in %)2.7-6.7-4.8-0.90.7
Policy Interest Rate (%)4.004.003.003.004.75
Stock Market (annual variation in %)22.8-3.9-1.625.1-12.8
Exchange Rate (vs USD)44.7946.9349.6050.0152.50
Exchange Rate (vs USD, aop)44.4045.5347.5050.4052.67
Current Account (% of GDP)3.82.5-0.4-0.7-2.6
Current Account Balance (USD bn)10.87.3-1.2-2.1-8.7
Trade Balance (USD billion)-3.3-12.2-26.7-27.4-43.5
Exports (USD billion)62.158.857.468.769.3
Imports (USD billion)65.471.184.196.1113
Exports (annual variation in %)9.5-5.3-2.419.70.9
Imports (annual variation in %)4.88.718.414.217.4
International Reserves (USD)79.580.780.781.679.2
External Debt (% of GDP)27.326.524.523.323.9

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Philippines Facts

Value Change Date
Bond Yield4.44-4.11 %Dec 27
Exchange Rate50.660.02 %Jan 01

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