Philippines Economic Forecast

Philippines Economic Outlook

July 17, 2018

The latest indicators suggest that the economy grew robustly in the second quarter, supported by fiscal stimulus measures. The average manufacturing PMI readings for Q2 exceeded the average recorded in the previous quarter. Furthermore, the sector’s strong momentum should carry into Q3, as client demand in June improved notably, and business expectations relating to future output were high. Furthermore, growth in retail sales quickened in May, supported by higher disposable incomes and elevated consumer confidence in Q2. Buoyant domestic economic activity, however, is weakening the country’s external position. The trade deficit unexpectedly widened in May due to surging imports of capital goods linked to construction of public infrastructure. Similarly, the government announced in early July it plans to exceed the fiscal deficit target of 3.0% for 2019 by 0.2 percentage points to ramp up public spending. Widening fiscal and trade deficits will increase the country’s exposure to economic shocks amid heightened financial volatility and fears of a global trade war.

Philippines Economic Growth

The economy is expected to grow at a brisk pace this year and next on the back of elevated public spending and fixed investment. Fiscal stimulus, however, is causing economic imbalances to build up and stoking fears that the economy might overheat. Met the why particular panelists see GDP growth of 6.7% in 2018, unchanged from last month’s forecast, and 6.6% in 2019.

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 Yield6.77-4.11 %Aug 15
Exchange Rate53.550.02 %Aug 15
Stock Market7,5410.66 %Aug 15

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