PHL economy to grow close to 6-7% target this year, says Marcos

PHILIPPINE President Ferdinand R. Marcos, Jr. struck an optimistic note about the prospects of his nation’s economy, voicing confidence that the country was on track to grow close to its target this year.

“We are confident that the country will post a full-year economic growth that is close to the 6%-7% target for 2023,” Mr. Marcos said on Wednesday at a briefing on the Philippine economy in San Francisco.

The Philippine economy is on track to post Southeast Asia’s quickest expansion this year after growing 5.9% in the third quarter. However, softer consumer spending and a decline in investment amid high interest rates and weaker global expansion have spurred doubts that robust growth would last.

“Inflation is slowly coming down,” Mr. Marcos said. “We are committed to arresting inflation and maintaining overall price stability through supply-side interventions and demand-side management measures,” he added.

Philippine inflation came in sharply slower than anticipated in October, giving policy makers reason to pause their most aggressive monetary tightening in two decades.

The recent inflation numbers are “good news,” Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. told reporters after Mr. Marcos spoke.

The Philippine central bank has said that monetary policy will remain tighter for longer until inflationary expectations are back on target. The economic impact of the country’s policy rate adjustments, which started in the second quarter of last year, is projected to peak in the second half of 2024.

‘DOABLE’ TARGET
At the same time, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan expressed optimism the Philippines can achieve its 6.5-8% medium-term GDP growth target as the government ramps up infrastructure spending and inflation continues to ease.

“Next year, medium term, we are targeting 6.5-8% [GDP growth] up to 2028, and I think with the target to move inflation to the 2-4% range… I think the 6.5-8 % growth for the medium term is very much within the possibilities,” he said during the Philippine economic briefing.

For this year, Mr. Balisacan said the 6-7% GDP growth target can still be achieved after the better-than-expected third-quarter print.

“For us to achieve the lower end of the target range of 6%, we need to grow in the fourth quarter by at least 7.2 %. Now is that doable? I think yes. It’s still doable. There’s still much space for the acceleration of government spending which hounded the performance in the first half of the year, there’s still much space there,” the NEDA chief said.

Mr. Balisacan said he expects inflation to continue moderating, which will lift consumer spending.

“With nearly two-thirds of the economy dependent on domestic consumption, we can imagine the impact of inflation on the economy,” he said.

The government will also be ramping up major infrastructure programs, which will boost GDP growth by one percentage point in 2024, Mr. Balisacan said.

The government aims to spend 5-6% of GDP for infrastructure until 2028.

NEDA also has 197 infrastructure flagship projects worth P8.71 trillion under the “Build, Better, More” program. 

These projects are in physical and digital connectivity, water resources, agriculture, health, and power and energy. — Bloomberg with A.M.C.Sy