Philippine economy expected to grow by 5.5% in 2023: FMIC, UA&P

29 Sep '23

2 min read

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Insights

Despite the global slowdown, First Metro Investment Corp, the investment banking arm of the Metrobank Group, and University of Asia and the Pacific Capital Markets Research expect the Philippine economy to grow by 5.5 per cent this year—below the government's target of 6-7 per cent.
Both expect the economy to grow by 5-5.2 per cent in the third quarter this year.

Despite the global slowdown, First Metro Investment Corp (FMIC), the investment banking arm of the Metrobank Group, and University of Asia and the Pacific (UA&P) Capital Markets Research expect the Philippine economy to grow by 5.5 per cent this year—below the government’s target of 6-7 per cent.

Heavy rains are expected to prevent a sharp rebound in growth in the third quarter (Q3). A strong rebound in jobs and consumption spending is expected by September in preparation for the Christmas season, they said.

The country’s economic growth slowed to 4.3 per cent in Q2 this year from 6.4 per cent in Q1 and 7.5 per cent in Q2 2022, as high prices and interest rates dampened consumption.

The economy grew by 5.3 per cent in the first half this year.

FMIC and UA&P expect the economy to grow by 5-5.2 per cent in Q3 this year, to be driven largely by government spending as heavy rains kept consumers at home, both said in the Market Call report for September released recently.

Despite their expectation that inflation will remain elevated until October, both said it would likely be back within the central bank’s target range of 2-4 per cent by November, according to domestic media reports.

Inflation accelerated to 5.3 per cent in August, reversing a six-month downtrend. That was within the central bank’s 4.8-5.6 per cent forecast for that month, but was faster than the previous month’s rate of 4.7 per cent.

In the January to August period, inflation averaged at 6.6 per cent.

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