Philippines Economic Forecast

Philippines Economic Outlook

May 22, 2018

Economic growth shifted into a higher gear in the first quarter of the year, largely reflecting the impact of the government’s vast infrastructure spending program: Fixed investment and public consumption grew robustly, and imports surged. Meanwhile, private consumption growth decelerated due to rising inflation and dwindling remittance inflows throughout the quarter. Higher inflation and buoyant economic activity have sparked fears that the economy may overheat, as recent reports signal that manufacturing capacity in major industries were producing at or near full capacity. Despite this risk, S&P Global Ratings revised the country’s outlook from stable to positive and upheld its BBB rating on 26 April. The credit rating agency praised the limited level of indebtedness and notable improvements made in tax collection, which has enabled the government to push through a vast public spending program without compromising fiscal health.

Philippines Economic Growth

The economy is expected to grow at a robust pace this year and next on the back of a buoyant expansion in fixed investment, which is benefiting from strong public spending and favorable credit conditions at home. Prospects of an overheating economy and capital outflows due to faster monetary tightening by the U.S. Federal Reserve could, however, weigh on growth. Met the why particular panelists see GDP growth of 6.6% in 2018, unchanged from last month’s forecast, and 6.6% again in 2019.

Philippines Economy Data

20132014201520162017
Population (million)98.2110112114116
GDP per capita (USD)2,7682,8412,8642,926-  
GDP (USD bn)272285293305-  
Economic Growth (GDP, annual variation in %)7.16.16.16.9-  
Consumption (annual variation in %)5.65.66.37.0-  
Investment (annual variation in %)11.87.216.925.2-  
Manufacturing (annual variation in %)11.38.35.77.0-  
Retail Sales (annual variation in %)2.72.71.22.3-  
Unemployment Rate7.16.86.35.5-  
Fiscal Balance (% of GDP)-1.4-0.6-0.9-2.4-  
Public Debt (% of GDP)49.245.444.742.1-  
Money (annual variation in %)33.511.59.113.3-  
Inflation Rate (CPI, annual variation in %, eop)4.12.71.52.6-  
Inflation Rate (CPI, annual variation in %)2.94.21.41.8-  
Inflation (PPI, annual variation in %)1.62.7-3.91.1-  
Policy Interest Rate (%)3.504.004.003.00-  
Stock Market (annual variation in %)1.322.8-3.9-1.6-  
Exchange Rate (vs USD)44.3944.7946.9349.60-  
Exchange Rate (vs USD, aop)42.4644.1145.5347.50-  
Current Account (% of GDP)4.23.82.50.2-  
Current Account Balance (USD bn)11.411.87.30.6-  
Trade Balance (USD billion)-5.7-3.3-12.2-27.7-  
Exports (USD billion)56.762.158.856.4-  
Imports (USD billion)62.465.471.184.1-  
Exports (annual variation in %)8.89.5-5.3-4.2-  
Imports (annual variation in %)0.54.88.718.4-  
International Reserves (USD)83.279.580.780.7-  
External Debt (% of GDP)28.927.326.525.1-  

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Philippines Facts

ValueChangeDate
Bond Yield6.87-4.11 %May 21
Exchange Rate52.350.02 %May 21
Stock Market7,6580.66 %May 21

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