Philippines Economic Forecast

Philippines Economic Outlook

April 24, 2018

Economic activity remained buoyant in the first quarter, supported by strong infrastructure expenditure and resilient consumer spending. Fiscal expenditure jumped over a fourth in January and February, and in the same period bank lending for productive activities and household consumption expanded almost 20%, a signal of the economy’s overall good health. However, the effects of sales tax hikes from the Tax Reform for Acceleration and Inclusion (TRAIN) weighed on the manufacturing sector. The first-quarter average PMI fell to its lowest level in two years on lower new orders. That said, in January and February retail sales expanded robustly, although the effects of the tax reform were also felt by consumers: Consumer confidence declined in Q1, potentially hitting the outlook for coming quarters. The external sector also showed some weakness, as merchandise exports performed poorly in the first two months of the year.

Philippines Economic Growth

Solid household spending on the back of rising remittances and favorable financing conditions will continue to drive growth this year. Moreover, the government’s investment push will spur infrastructure spending. However, sustained inflation risks hitting consumer spending, although gains from lower income taxes could act in the opposite direction. The main downside risks to growth are cooling demand from China and further potential capital outflows due to the Fed’s tightening cycle. Met the why particular panelists see GDP growth of 6.6% in 2018, unchanged from last month, and also 6.6% in 2019.

Philippines Economy Data

Population (million)98.2110112114116
GDP per capita (USD)2,7682,8412,8642,926-  
GDP (USD bn)272285293305-  
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-  
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)  
Inflation Rate (CPI, annual variation in %)  
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)  
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 %)  
International Reserves (USD)83.279.580.780.7-  
External Debt (% of GDP)28.927.326.525.1-  

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Philippines Facts

Bond Yield6.55-4.11 %May 16
Exchange Rate52.240.02 %May 16
Stock Market7,8700.66 %May 16

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