Philippines Economic Forecast

Philippines Economic Outlook

February 20, 2018

The economy remained buoyant in the fourth quarter, with annual GDP growth decelerating only slightly from the previous quarter’s remarkable performance. Both private and public consumption expanded at faster paces than in Q3, as did fixed investment on the back of government’s ongoing infrastructure push. However, household spending may have weakened at the start of 2018, due to the entry into force of the Tax Reform for Acceleration and Inclusion (TRAIN) on 1 January. Annual growth in car sales, which were hit by higher duties, was subdued in January. Excise tax hikes were also behind the weak start to 2018 of the manufacturing sector, as shown by the weak PMI reading in January. The effects of higher taxes were, however, felt on public coffers, as suggested by the double-digit spike in year-on-year growth in tax collection recorded in January. Going forward, this should provide resources for the government’s ambitious infrastructure program.

Philippines Economic Growth

The pace of economic expansion should remain broadly stable this year. Fixed investment will be spurred by a ramp-up in infrastructure spending and strong credit expansion. Moreover, private consumption, following an initial slowdown due to higher excise taxes, should benefit from lower income taxes and growing remittances. The main downside risks stem from a slow implementation of infrastructure projects and tighter financing conditions. Met the why particular panelists see GDP growth of 6.6% in 2018, unchanged from last month’s forecast, and 6.5% in 2019.

Philippines Economy Data

20122013201420152016
Population (million)96.598.2110112114
GDP per capita (USD)2,5922,7682,8412,8642,926
GDP (USD bn)250272285293305
Economic Growth (GDP, annual variation in %)6.77.16.16.16.9
Consumption (annual variation in %)6.65.65.66.37.0
Investment (annual variation in %)11.811.87.216.925.2
Manufacturing (annual variation in %)5.411.38.35.77.0
Retail Sales (annual variation in %)2.12.72.71.22.3
Unemployment Rate7.07.16.86.35.5
Fiscal Balance (% of GDP)-2.3-1.4-0.6-0.9-2.4
Public Debt (% of GDP)51.549.245.444.742.1
Money (annual variation in %)9.433.511.59.113.3
Inflation Rate (CPI, annual variation in %, eop)3.04.12.71.52.6
Inflation Rate (CPI, annual variation in %)3.22.94.21.41.8
Inflation (PPI, annual variation in %)1.11.62.7-3.91.1
Policy Interest Rate (%)3.503.504.004.003.00
Stock Market (annual variation in %)33.01.322.8-3.9-1.6
Exchange Rate (vs USD)41.0644.3944.7946.9349.60
Exchange Rate (vs USD, aop)42.2142.4644.1145.5347.50
Current Account (% of GDP)2.84.23.82.50.2
Current Account Balance (USD bn)6.911.411.87.30.6
Trade Balance (USD billion)-11.0-5.7-3.3-12.2-27.7
Exports (USD billion)52.156.762.158.856.4
Imports (USD billion)62.162.465.471.184.1
Exports (annual variation in %)7.98.89.5-5.3-4.2
Imports (annual variation in %)2.60.54.88.718.4
International Reserves (USD)83.883.279.580.780.7
External Debt (% of GDP)32.028.927.326.525.1

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Philippines Facts

ValueChangeDate
Bond Yield6.80-4.11 %Feb 22
Exchange Rate51.890.02 %Feb 22
Stock Market8,5160.66 %Feb 22

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