Economist expects slower PH economy in 2023
MANILA, PHILIPPINES — The economic growth of the Philippines could slow down to six per cent in 2023 from the projected 7.5 to 7.7% this year, said RCBC chief economist Michael Ricafort.
Ricafort explained that headwinds — such as higher prices, higher interest rates, and the risk of recession in the U.S. — could affect the country’s economy next year.
The continued COVID-19 lockdowns in China, Russia-Ukraine war could also aggravate global supply chain disruptions which would contribute to a slower economic growth around the world.
Ricafort added that more rate hikes by the U.S. Federal Reserve amid the latest hawkish signals could increase the odds of recession as an unintended consequence amid the quest to significantly bring down elevated inflation.
However, the economist is expecting Philippine inflation to ease to between 4.5 and 5.5% next year as global crude oil prices drop to near one-year lows.
As for economic drivers for 2023, Ricafort believes that high remittances from Overseas Filipino Workers (OFWs), record high employment, manufacturing among pre-pandemic highs and further increase in government spending will help the country’s economy next year.
The continued growth of the Business Process Outsourcing (BPO) industry, the resurgence in mining activities, electric vehicles, renewable power, as well as the intensification of productivity in agriculture, manufacturing, tourism, and other priority sectors will also aid economic growth in 2023.
