Philippines Economic Forecast

Philippines Economic Outlook

November 17, 2020

The economy shrank sharply in Q3 according to recent data, albeit at a softer rate than Q2’s record downturn. Private consumption and fixed investment continued to collapse amid a weak labor market and suppressed sentiment. Moreover, fiscal support dried up, with government spending growth slowing markedly. The external sector contributed to GDP, although this was chiefly due to a collapse in imports on depressed demand. Turning to Q4, conditions are likely still downbeat. The manufacturing PMI slipped back into contractionary territory in October on a renewed fall in new orders. Moreover, Covid-19 restrictions linger, while the country has been lashed by devastating typhoons in recent weeks, causing economic disruption and likely hurting the agricultural sector. In addition, although a USD 3.4 billion stimulus package was introduced in September, spending execution has so far been lackluster.

Philippines Economic Growth

Following 2020’s collapse, growth should return next year as both the domestic and external sectors recover. However, possible further lockdown measures to contain the virus, tepid fiscal support and structural damage to the labor market pose downside risks. FocusEconomics Consensus Forecast panelists project GDP to increase 7.1% in 2021, which is down 0.1 percentage points from last month’s estimate. For 2022, 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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