The Asean+3 Macroeconomic Research Office (AMRO) has kept its growth forecast for the Philippines and expects it to fall below the government’s growth assumptions.
According to the Asean+3 Regional Economic Outlook Update released yesterday, growth is forecasted to have moderated to 5.6 percent in 2023 before picking up to 6.3 percent this year.
The projections are the same as in AMRO’s 2023 Annual Consultation Report on the Philippines released last November.
AMRO’s latest growth estimates fall below the government’s growth outlook of 6 percent to 7 percent for 2023 and 6.5 to 7.5 percent this year.
The report, however, still compares its most recent outlook to the higher October projection of 5.9 percent growth for 2023 and 6.5 percent expansion this year for the Philippines.
“We have shaved down growth from 5.9 percent to 5.6 percent last year based on the weaker outturn in the fourth quarter. As it turns out, I think we were too optimistic on the growth momentum,” Hoe Ee Khor, AMRO chief economist, said in a virtual briefing yesterday.
“We also shaved down growth for Philippines this year from 6.5 percent to 6.3 percent, but it’s still one of the highest growth in the region,” he added.
Khor said the Philippine economy has held up very well despite high inflation and interest rates, and it is much less dependent on exports than other countries in the region.
Inflation is seen to moderate from 6 percent last year to 3.6 percent in 2024, within the 2 to 4 percent inflation target.
“We agree with the BSP (Bangko Sentral ng Pilipinas) view that the rates should remain tight until inflation is down to within target. As you can see the average for the whole year (of 2023) is 6 percent, we expect it to come down to 3.6 percent this year, which is within the target band but is above the midpoint,” Khor said.
In its November report, AMRO said the Philippine economic outlook is clouded by various risk factors and challenges.
“In the short term, high inflation, economic slowdown in major trading partners and volatility in global financial markets along with tighter financial conditions could pose risks,” the report said.
