Philippines Economic Forecast

Philippines Economic Outlook

July 16, 2019

The economy appears to have had a resurgence in the second quarter. Exports continued to gradually recover in May, and business confidence improved in the quarter. Moreover, government data revealed public spending ramped up in May, as policymakers try to achieve their 2019 growth target and make up for lost time from the budget impasse in H1. Although remittances slowed in April, a rock-solid U.S. labor market should have kept remittances afloat in May and June, while cooling inflation likely boosted consumer spending in Q2. Nevertheless, external headwinds linger. Particularly, while the manufacturing sector was again resilient in June compared to regional peers, weak demand and rising inventories signal growth in the sector could slow in the quarters ahead if new business orders remain lackluster. Likewise, the business outlook for Q3 was less upbeat due to expected interruptions from the rainy season.

Philippines Economic Growth

Economic momentum should gather steam in the second half of the year thanks to fiscal stimulus and more accommodative monetary conditions. Government spending on infrastructure projects should rebound in H2, which should in turn boost private investment. The U.S.-China trade dispute and a regional slowdown, however, represent key risks to the outlook. FocusEconomics panelists see GDP expanding 6.0% in 2019, which is down 0.1 percentage points from last month’s forecast, and 6.2% in 2020.

Philippines Economy Data

20132014201520162017
Population (million)98.299.9102103105
GDP per capita (USD)2,7682,8492,8812,9532,989
GDP (USD bn)272285293305314
Economic Growth (GDP, annual variation in %)7.16.16.16.96.7
Consumption (annual variation in %)5.65.66.37.15.9
Investment (annual variation in %)11.87.216.926.19.4
Manufacturing (annual variation in %)10.38.35.77.18.4
Retail Sales (annual variation in %)2.72.71.22.33.5
Unemployment Rate7.16.86.35.55.7
Fiscal Balance (% of GDP)-1.4-0.6-0.9-2.4-2.2
Public Debt (% of GDP)49.245.444.742.142.1
Money (annual variation in %)33.510.59.113.311.6
Inflation Rate (CPI, annual variation in %, eop)3.81.90.72.22.9
Inflation Rate (CPI, annual variation in %)2.63.60.71.32.9
Inflation (PPI, annual variation in %)1.62.7-3.91.14.4
Policy Interest Rate (%)3.504.004.003.003.00
Stock Market (annual variation in %)1.322.8-3.9-1.625.1
Exchange Rate (vs USD)44.3944.7946.9349.6050.01
Exchange Rate (vs USD, aop)42.4644.4045.5347.5050.40
Current Account (% of GDP)4.23.82.5-0.4-0.7
Current Account Balance (USD bn)11.410.87.3-1.2-2.1
Trade Balance (USD billion)-5.7-3.3-12.2-26.7-27.4
Exports (USD billion)56.762.158.857.468.7
Imports (USD billion)62.465.471.184.196.1
Exports (annual variation in %)8.89.5-5.3-2.419.7
Imports (annual variation in %)0.54.88.718.414.2
International Reserves (USD)83.279.580.780.781.6
External Debt (% of GDP)28.927.326.524.523.3

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Philippines Facts

ValueChangeDate
Bond Yield5.05-4.11 %Jul 11
Exchange Rate51.200.02 %Jul 11
Stock Market8,1540.66 %Jul 11

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