CEBU, Philippines — The Philippine economy continues to stand out as a global outperformer, driven by robust domestic consumption and a favorable demographic profile.
Despite global economic headwinds, the country demonstrates remarkable resilience and growth potential, solidifying its position as a key player in the region.
Dante Tinga Jr., Senior Vice President of BDO Unibank’s Investor Relations Group, made this optimistic outlook during an exclusive economic briefing attended by over 80 Japanese corporate executives.
The event, tailored for BDO’s Japanese clients, shed light on the Philippines’ strong economic fundamentals, including its young population and dynamic consumer market.
The BDO analyst, Tinga emphasized the critical role of the country’s demographics, with half of the population aged 25 or younger and an annual growth rate of 1.6 percent.
This demographic advantage has fueled domestic consumption, which has surpassed pre-pandemic levels.
The resurgence of overseas labor deployment and a steady stream of remittances have strengthened Filipino households' purchasing power, supporting consumption-led economic growth.
Inflation has returned to the Bangko Sentral ng Pilipinas' (BSP) target range, creating room for potential monetary easing, he explained.
He said government measures, such as reduced import tariffs on rice, have stabilized prices, paving the way for lower interest rates.
Analysts anticipate that the BSP’s cautious rate cuts will stimulate business investments and boost consumer confidence, further enhancing the country’s growth prospects.
On the global stage, easing monetary policies, including those of the U.S. Federal Reserve, align with the Philippines’ local conditions.
Lower global interest rates are expected to reinvigorate private sector investments, improve business sentiment, and help the Philippine economy regain its pre-pandemic growth trajectory.
However, Tinga noted the challenges posed by external risks, including potential shifts in U.S. fiscal policies and the strengthening of the dollar, which could impact import costs and the peso's stability.
He also underscored the importance of upskilling the workforce to remain competitive in a rapidly digitizing global economy.
Private capital expenditures, which were previously constrained by high interest rates, are now poised for recovery as inflation stabilizes and borrowing costs decline.
He said this improving investment climate, coupled with the country’s robust domestic consumption, positions the Philippines for accelerated growth.
BDO Unibank’s Japan Desk plays a pivotal role in strengthening economic ties between Japan and the Philippines.
By providing tailored solutions and insights to Japanese businesses operating in the country, the Desk supports mutual growth opportunities.
Tinga reaffirmed the importance of fostering international investor confidence to sustain the Philippines' upward economic trajectory.
With a resilient economy and favorable market conditions, the Philippines is set to reinforce its status as a leading growth hub in the Asia-Pacific region.