MANILA, Philippines — The economic growth forecast for the Philippines has been revised upward for this year as the country’s third quarter economic performance exceeded expectations and as consumption is seen to remain strong in the fourth quarter, according to a survey of the Japan Center for Economic Research (JCER).
Results of JCER’s quarterly consensus survey on Asian economies released yesterday showed the average growth forecast for the Philippines for this year is now at 7.1 percent, up from the 6.5 percent forecast in the previous survey in September.
The revised forecast is within the government’s 6.5 to 7.5 percent gross domestic product (GDP) growth target for this year.
Economists polled by the JCER for the survey conducted from Nov. 25 to Dec. 15 include Metropolitan Bank and Trust Co. research and business analytics officer Ina Judith Calabio, Union Bank of the Philippines chief economist Carlo Asuncion, Philippine Equity Partners Inc. managing director Jojo Gonzales, De La Salle University School of Economics associate dean Mitzie Conchada, ING Bank senior economist Nicholas Mapa, Nomura Singapore Ltd. chief ASEAN economist Euben Paracuelles and Barclays Bank Singapore regional economist Shreya Sodhani.
After the stronger-than-expected 7.6 percent GDP growth in the third quarter, the JCER survey showed the economists are forecasting a 5.8 percent growth in the fourth quarter, higher than the previous average forecast of 4.3 percent.
From January to September, the average economic growth was at 7.7 percent.
Asuncion said “after three consecutive quarters of re-opening themes amid severe macro challenges... our fourth quarter outlook shows spending normalization, although it’s still upbeat on a quarter-on-quarter basis.”
Mapa said the expectation is for “consumption to remain robust during the first Christmas post-lockdown.”
For next year, the JCER survey showed the economists’ average GDP growth forecast was trimmed slightly to 5.3 percent from the previous 5.4 percent. This forecast is below the six to seven percent GDP growth target set by the government for next year.
While the 2023 GDP outlook has been revised slightly downward for the Philippines, the JCER said the mood is not pessimistic as growth is expected to remain strong through the first half of next year due to domestic demand.
The JCER survey also showed the average growth forecast for 2024 was trimmed slightly to 5.9 percent from six percent, previously. This is also below the government’s 6.5 to eight percent growth target for that year.
In terms of risks for next year, the JCER survey showed inflation topped the list, stemming mainly from geopolitical tensions.
The JCER survey showed economists expect the country’s inflation rate to be at 5.8 percent this year, and to ease to five percent in 2023 and to 3.5 percent in 2024.
Last month, the country’s headline inflation rate surged to a 14-year high of eight percent, bringing the average for the January to November period to 5.6 percent, below the Development Budget Coordination Committee’s 5.8 percent assumption for the year.
Other risks seen for next year are the depreciation of the peso, rise in commodity prices, Chinese economic slowdown, and US economy’s recession.
“The looming recession in China due to COVID-19-related restrictions puts pressure on global supply chains,” Conchada said.
When asked about the most important issues for 2023, most economists cited a possible ceasefire between Ukraine and Russia.
Conchada said a ceasefire between the two countries “will definitely help ease inflationary pressures in [the Philippines] on the lifting of the ban on energy/gas supply from Russia.”