Philippines Economic Forecast

Philippines Economic Outlook

January 25, 2022

After better-than-expected growth in Q3, activity likely slowed in Q4, mainly due to a tougher base effect. Underlying momentum appeared robust, amid looser restrictions and fewer Covid-19 cases. The manufacturing PMI averaged higher, suggesting a pickup in growth of industry, while solid expansions in retail sales and remittances through November suggest healthy private spending. In Q1, activity is likely slowing further. Covid-19 cases have skyrocketed due to Omicron, and restrictions have been tightened as a result. Moreover, Typhoon Rai hit in December, causing significant economic damage and raising inflationary risks, which may dent spending early this year. In politics, the president recently signed a law liberalizing the retail sector. Meanwhile, Marcos Jr., son of the late dictator Ferdinand Marcos, has emerged as the frontrunner in this year’s presidential election.

Philippines Economic Growth

Activity should pick up this year as expanding vaccination coverage boosts spending. Fiscal and monetary stances should remain supportive, while the government’s infrastructure program is likely to continue boosting investment. Key risks include new Covid-19 variants, this year’s election, fiscal decentralization reforms, inflationary pressures and extreme weather events. FocusEconomics Consensus Forecast panelists project GDP to increase 6.9% in 2022, which is down 0.1 percentage points from last month’s estimate. For 2023, they forecast economic growth of 6.4%.

Philippines Economy Data

2015 2016 2017 2018 2019
Population (million)102103105107108
GDP per capita (USD)3,0153,0863,1313,2533,480
GDP (USD bn)306319329347377
Economic Growth (GDP, annual variation in %)6.37.16.96.36.0
Consumption (annual variation in %)6.47.26.05.85.9
Investment (annual variation in %)13.820.910.612.93.9
Manufacturing (annual variation in %)5.26.88.05.13.2
Retail Sales (annual variation in %)-57.310249.012.4-  
Unemployment Rate6.35.55.75.35.1
Fiscal Balance (% of GDP)-0.9-2.3-2.1-3.1-3.4
Public Debt (% of GDP)42.740.240.239.939.6
Money (annual variation in %)9.113.311.68.610.9
Inflation Rate (CPI, annual variation in %, eop)0.72.22.95.12.5
Inflation Rate (CPI, annual variation in %)0.71.32.95.22.5
Inflation (PPI, annual variation in %)-6.7-4.8-0.90.71.6
Policy Interest Rate (%)4.003.003.004.754.00
Stock Market (annual variation in %)-3.9-1.625.1-12.84.7
Exchange Rate (vs USD)46.9349.6050.0152.5050.66
Exchange Rate (vs USD, aop)45.5347.5050.4052.6751.78
Current Account (% of GDP)2.4-0.4-0.7-2.5-0.1
Current Account Balance (USD bn)7.3-1.2-2.1-8.8-0.5
Trade Balance (USD billion)-12.2-26.7-27.4-43.5-40.7
Exports (USD billion)58.857.468.769.370.9
Imports (USD billion)71.184.196.1113112
Exports (annual variation in %)-5.3-2.419.70.92.3
Imports (annual variation in %)8.718.414.217.4-1.1
International Reserves (USD)80.780.781.679.287.8
External Debt (% of GDP)25.323.522.322.822.2

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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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