By JOCELYN MONTEMAYOR and ANGELA CELIS
The economy may have grown faster than target last year but expectations for 2023 have been tempered.
At last Monday’s luncheon hosted for President Marcos Jr. and his delegation who are attending the World Economic Forum (WEF) in Davos, Switzerland, Finance Secretary Benjamin Diokno said the Philippines
expects a “strong” annual gross domestic product that may even be higher than the 6.5 percent to 7.5 percent target for 2022.
Meanwhile, in a January update, Asean+3 Macroeconomic Research Office (AMRO) has slightly revised downwards its growth forecast for the Philippines this year amid global headwinds.
Diokno attributed the faster 2022 growth to the country’s “bustling manufacturing sector, record-low unemployment, and stable and resilient banking system” which he said is expected to continue this year.
Diokno said for 2023, taking into account an expected slowdown of the global economy, the economy is forecast to grow by around 6.5 percent which is “one of the highest, if not, the highest growth projection in the Asia-Pacific Region.”
He said opening economic sectors to foreign equity, improving the ease of doing business and allowing for modern transformative industries to take root and grow will further sustain the economy.
Diokno said the Marcos government has also created a more competitive and enabling environment through public-private partnership (PPP) to further expand the “Build, Better, More Infrastructure” agenda of the administration which will further boost investments on top of the government’s goal to spend at least 5 percent to 6 percent of GDP on infrastructure.
Diokno said all these will form the backbone for the rapid and sustained growth for the Philippines.
At the luncheon, Diokno also bared that the Philippines is now taking the first steps toward launching the Maharlika Investment Fund (MIF) which is the country’s first ever sovereign wealth fund that will support the goals set by the administration in the Philippine Development Plan 2023-2028.
“The fund, which will be established in keeping with the highest standards of accountability and sound fiscal management, aims to diversify the country’s financial portfolio,” he said, adding that he looks forward to discussing the MIF during the WEF.
The House of Representatives last December 15 approved on third and final reading House Bill No. 6608 or the MIF bill after being certified as urgent by the President. It was transmitted to the Senate last December 19.
Meanwhile, AMRO in an update said it sees a 6.2 percent growth for the Philippines this year, 0.1 percentage point down from its 6.3 percent forecast last October.
Meanwhile, the 2022 full year growth for the Philippines is now estimated at 7.3 percent, faster than the October outlook of 6.9 percent.
“This (2023 forecast) is still a very strong growth rate. So the economy overall has done well. Inflation is relatively high, but that’s because unlike some of the countries, the Philippines does not have any (rice) subsidies to contain inflation,” AMRO chief economist Hoe Ee Khor said in a press briefing yesterday.
“But I think the central bank has been very proactive,” he added.
AMRO also sees faster inflation for the Philippines with updated forecasts of 5.8 percent from the previous estimate of 5.1 percent for 2022, and 4.3 percent instead of the previous outlook of four percent for 2023.
“Our recommendation had been that, once the economy is recovering very strongly and growth is entrenched, then the central bank should focus on inflation and countering inflation, and that I think is what the BSP (Bangko Central ng Pilipinas) has been doing,” Khor said.
