Philippines likely grew below target in 2023 – economists

MANILA, Philippines — The economy likely posted growth below the government’s target of six to seven percent in 2023, according to economists.

Oxford Economics economist Makoto Tsuchiya said in an email his full year 2023 growth forecast is at five percent, the lowest growth since 2011, excluding 2020 - the height of the COVID crisis.

He also said he expects the economy to have posted 3.6 percent growth in the fourth quarter, slower than the previous quarter’s 5.9 percent expansion, with the slowdown likely due to lower consumer spending and exports growth.

“We expect the pent-up demand in certain services sectors, such as recreation, accommodation and restaurants continued to fade, while soft global growth and maturing recovery in the tourism sector led to a slowdown in exports,” he said.

Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco said the economy is expected to have posted a 4.8 percent growth in the fourth quarter and 5.4 percent for the whole of 2023.

“The main cause for the slowdown we expect in Q4 is a further moderation in private consumption growth, an area that is now having to contend with a lack of savings and more debt,” he said.

Colegio de San Juan de Letran Graduate School dean Emmanuel Lopez said his fourth quarter gross domestic product (GDP) growth estimate is at six percent “due to the massive consumer spending which are normally displayed during the last quarter of the year.”

He said his full year 2023 GDP forecast is at 5.5 percent.

For Ateneo Center for Economic Research and Development director Ser Percival Peña-Reyes, the economy likely posted a 5.8 percent growth in the fourth quarter and 5.6 percent for full year 2023.

Oikonomia Advisory & Research Inc. president and chief economist John Paolo Rivera said his GDP growth forecast for the fourth quarter is at 6.5 percent, citing increased government and household spending for the holiday season.

For full year 2023, he expects growth to be at 5.8 percent.

“Economic growth is tempered by the persistence of high interest rates that constraints borrowing to finance productive economic activities,” Rivera said.

Economic Planning Secretary Arsenio Balisacan is hopeful of seeing faster growth in the fourth quarter than the previous quarter, citing encouraging indicators, such as developments in the labor market and lower inflation.

Inflation eased to 3.9 percent in December from 4.1 percent in November. It averaged six percent in 2023, higher than the 5.8 percent in 2022.

While the government is aiming to hit at least the low end of the six to seven percent growth target for 2023, Balisacan said he would be happy to see a figure close to that, even if it is lower than the goal.

“I think despite the high inflation, spending is quite robust. Of course, it could have been much better if inflation has declined faster than what we have seen. But I think the fact that inflation is seen to continue to decrease should give confidence to people,” he said.

The Philippine Statistics Authority will release fourth quarter and full year 2023 GDP data on Jan.31.