Philippines Economic Forecast

Philippines Economic Outlook

January 22, 2019

The economy likely ended 2018 on a strong note, with Q4’s average PMI print posting the strongest quarterly result of the year and cash remittances sustaining solid growth in October and November. Nevertheless, the trade deficit remained elevated near a record high in November, as exports contracted on a drop in electronic parts shipments. Momentum will likely be broadly stable in Q1, despite tighter monetary conditions, as falling inflation supports household spending. On the political front, a government impasse over the 2019 general budget that caused lawmakers to miss the deadline to pass it could weigh on growth in the quarter, as the stalemate has put infrastructure projects and a government employee pay hike on hold. Moreover, a ban on infrastructure projects ahead of elections in May will also likely dampen government spending in H1.

Philippines Economic Growth

The economic outlook for 2019 remains promising thanks to a thriving domestic economy. Solid household spending, fueled by remittances, and strong investment, which should be driven in part by the government’s infrastructure program, should underpin domestic demand. However, if the government budget standoff drags on, H1 growth could be hampered significantly. Moreover, sharp import demand caused by the government’s infrastructure push and looser import quotas is expected to keep the current account balance in the red. Met the why particular panelists see GDP expanding 6.3% in 2019, which is down 0.1 percentage points from last month’s forecast, and 6.3% again in 2020.

Philippines Economy Data

Population (million)98.299.9112113115
GDP per capita (USD)2,7682,8492,8812,9532,978
GDP (USD bn)272285293305314
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Manufacturing (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate7.
Fiscal Balance (% of GDP)-1.4-0.6-0.9-2.4-2.2
Public Debt (% of GDP)49.245.444.742.142.1
Money (annual variation in %)33.511.59.113.311.6
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)1.62.7-
Policy Interest Rate (%)3.504.
Stock Market (annual variation in %)1.322.8-3.9-1.625.1
Exchange Rate (vs USD)44.3944.7946.9349.6050.01
Exchange Rate (vs USD, aop)42.4644.1145.5347.5050.11
Current Account (% of GDP)
Current Account Balance (USD bn)11.411.87.3-1.2-2.5
Trade Balance (USD billion)-5.7-3.3-12.2-26.7-30.0
Exports (USD billion)56.762.158.857.462.9
Imports (USD billion)62.465.471.184.192.9
Exports (annual variation in %)8.89.5-5.3-2.49.5
Imports (annual variation in %)
International Reserves (USD)83.279.580.780.781.6
External Debt (% of GDP)28.927.326.524.523.3

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Philippines Facts

Bond Yield6.49-4.11 %Jan 30
Exchange Rate52.160.02 %Jan 30
Stock Market7,9800.66 %Jan 30

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