Philippines Economic Outlook
September 21, 2021After GDP growth rebounded sharply in Q2, largely due to a supportive base effect, the economic landscape appears to have deteriorated in Q3. A surge in daily Covid-19 infections that began in July forced a gradual tightening of restrictions that culminated in a two-week lockdown of the capital in August. The services sector likely fared worse than the manufacturing sector, given its susceptibility to restrictions. That said, the manufacturing PMI slid into contractionary territory in August, on the back of supply chain disruptions and faltering output. Moreover, growth in both exports and imports receded in July–August, indicating deteriorating demand dynamics, while remittance growth hit a six-month low in August, likely inhibiting consumer spending in the period. A sluggish vaccination campaign and shortages of healthcare workers bode poorly for the economy in the final stretch of Q3.
Philippines Economic GrowthGDP growth should gain steam in 2022, boosted by higher consumer spending and an improving external sector, although milder public spending and the ongoing pandemic will likely temper the acceleration. Next year’s election is a key risk, with the president’s decision to stand for vice-president—the presidency is limited to one term—potentially causing political conflict. FocusEconomics Consensus Forecast panelists project GDP to increase 4.6% in 2021. For 2022, they forecast economic growth of 6.8%, which is down 0.2 percentage points from last month’s estimate.
Philippines Economy Data
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|Bond Yield||4.44||-4.11 %||Dec 27|
|Exchange Rate||50.66||0.02 %||Jan 01|
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Philippines Economic News
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) rose to 50.9 in September from August's 46.4.
September 14, 2021
Remittances totaled USD 2.9 billion in July, representing a 2.5% year-on-year expansion.
September 9, 2021
Merchandise exports rose 12.7% in annual terms in July, following June’s 18.8% jump.
September 7, 2021
Consumer prices rose a seasonally-adjusted 0.62% over the previous month in August, accelerating from the 0.39% increase logged in July.
September 1, 2021
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, edged down to 46.4 in August, following July’s 50.4.