Domestic pressures loom over bullish economic growth
MANILA, PHILIPPINES — The country’s economy saw a robust 7.6 per cent growth, the strongest performance since 1976, but analysts say domestic pressures are bound to taper the economy’s bullish expansion.
The Philippines closed 2022 booking a 7.2 per cent growth to its gross domestic product (GDP) in the final quarter. This brought the full-year GDP growth to 7.6 per cent, exceeding the government’s set target.
Despite this, Oxford Economics assistant economist Makoto Tsuchiya said that “the initial boost from pent-up demand will start to fade in the coming quarters.”
“Elevated inflation will continue to strain real purchasing power,” he continued.
Data shows personal consumption grew 7% year-on-year in the three months to December, the slowest pace since a contraction in the first quarter of 2021 when the nation had not fully reopened, a report by Bloomberg stated.
“The policy tightening to rein in that price growth — 350 basis points and counting — would continue to bring pain and spending restraint to other parts of the economy this year. The key rate at 5.5% is the highest since 2008,” the report read.
Overseas Filipino Workers (OFW) remittances and the outsourcing industry remain to be “bright spots” for the Philippines in 2023, according to Michael Ricafort, economist at Rizal Commercial Banking Corp.
Meanwhile, National Economic and Development Authority (NEDA) chief Arsenio Balisacan said that commitment to enhance governance, strengthen regulation and transparency will be key to boosting the economy.
