Philippines Economic Forecast

Philippines Economic Outlook

August 25, 2020

The economy contracted in Q2 at the sharpest rate since current records began amid a harsh domestic lockdown, with the downturn driven by plunging private consumption, investment and exports. However, a surge in government spending softened the fall. Turning to Q3, available data suggests momentum is still muted: The manufacturing PMI declined in July amid lower output, fewer new orders and reduced exports. In addition, surging Covid-19 cases led the government to impose a two-week lockdown in and around the capital, Manila, in early August, which will have depressed activity. At end-July, President Duterte approved a PHP 4.5 trillion (USD 93 billion) budget for 2021, slightly above revised spending estimates for 2020, as the government attempts to balance the desire to support the economy with the need to gradually rein in public debt and the fiscal deficit.

Philippines Economic Growth

The economy will shrink markedly this year, hit by weaker remittances, the prolonged, stringent domestic lockdown and soft foreign demand. While a ramp-up in fiscal and monetary stimulus should cushion the downturn somewhat, the possibility of further stop-start lockdowns to contain elevated infection rates is a key downside risk. FocusEconomics panelists see GDP falling 6.1% in 2020, which is down 2.2 percentage points from last month’s forecast. Next year, GDP is seen growing 7.5% in 2021.

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)13.820.910.612.93.9
Manufacturing (annual variation in %)
Retail Sales (annual variation in %)-57.310249.012.4-  
Unemployment Rate6.
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)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)-6.7-4.8-
Policy Interest Rate (%)
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)
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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