The Philippine economic growth is projected to moderate to 5.9 percent in 2023, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
In a policy meeting on Tuesday, Group Head and Principal Economist Runchana Pongsaparn said that the 5.9 percent movement of the country's economic growth is "due to high base effects and weaker external demand."
Compared to the 7.6 percent in 2022, which was the fastest since 1976’s 8.8% under the 2018 base year, the projection became slower in the current year.
Pongsaparn said that in 2024, economic growth is projected to moderate to 6.5 percent as external demand recovers.
"Meanwhile, domestic demand is expected to remain robust, supported by continued improvement in labor market conditions, lower inflation, robust overseas remittances, and higher government infrastructure spending," she added.
Headline CPI inflation is projected to moderate to 5.5 percent in 2023 from 5.8 percent in 2022 and slow further to 3.8 percent in 2024.
According to AMRO, despite the decline, the second-round impacts brought on by increases in the minimum wage, expectations of continuously high inflation, and the high level of core inflation, inflationary pressure will likely continue to be elevated.
"The Philippine economic outlook is clouded by various risk factors and challenges. In the short term, the economy could be adversely affected by high inflation, especially due to local supply shocks in the food sector," AMRO said.
"An economic slowdown in major trading partners and volatility in the global financial market, along with tighter financial conditions," it added.
The AMRO conducted the most recent assessment between August 29 and September 8 while on its annual consultation visit to the Philippines.
AMRO said that a comprehensive strategy is warranted to bolster the Philippines’ medium- to long-term economic growth potential.
