Growth targets cut amid sticky inflation, high rate
Slowdown in global economy, trade among reasons
MANILA: The Philippines has trimmed its economic growth estimates for this year and next as stubborn inflation and elevated interest rates crimp consumption and investment.
The country’s gross domestic product (GDP) for 2024 was projected to expand 6% to 7% from an earlier forecast range of 6.5% to 7.5%, Arsenio Balisacan of the economic team said in a televised briefing yesterday.
For 2025, the forecast was narrowed to 6.5% to 7.5% from the previous 6.5% to 8% band.
“Policy rates have long effects. The lower performance last year of the economy, and expectedly lower performance this year, is partly due to that,” Balisacan said.
The slowdown in the global economy and trade, along with the uptick in oil prices were also considered.
Even with the downward revision, the Philippines will remain among the fastest-growing economies in the region, he said, as the government vows to sustain infrastructure spending at 5% to 6% of GDP in the second half of Marcos’s six-year term and support an ambition of hitting an 8% GDP expansion.
Last month, president Ferdinand Marcos Jr told Bloomberg News that taking economic growth to the fastest level since 1976 when his father was president was doable.
For now, inflation remains the country’s biggest problem and that it’s too soon for the central bank to bring down borrowing costs that are at a 17-year high.
The GDP growth outlook for 2026-2028 was kept at 6.5% to 8%, Balisacan said.
The economy likely grew faster in the first quarter compared to the final three months of 2023 as the labour market and consumption improved, he said. It also proposed a national budget of 6.2 trillion pesos (Us$110bil) for fiscal year 2025, with spending focused on infrastructure and social services to help drive growth, Balisacan said.
The government will also look for other ways to bring down debt-to-gdp in light of slower growth expectations.