FINANCE Secretary Benjamin Diokno has expressed optimism that the Philippine economy will perform even better in 2024 after doing well under a challenging economic and financial environment in 2023 brought about by the ongoing geopolitical tensions, trade restrictions, and high domestic commodity prices.
In a statement, Diokno said the country may surpass its performance last year in terms of economic growth, noting the reconstitution of the Economic Development Group (EDG) and the creation of the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO), along with the implementation of coherent macroeconomic policies, particularly with the establishment of the Medium-Term Fiscal Framework (MTFF), and the implementation of game-changing structural reforms.
“Most multilateral organizations share this optimism as they expect the Philippines to be one of the fastest growing economies among the major economies in Asia in 2023 and 2024 even with recent revisions in economic projections,” he said.
“The International Monetary Fund (IMF) sees that the Philippine economy will have the strongest growth relative to Asean-4, and Vietnam supported by an acceleration in public investment and improved external demand for the Philippines’ exports, after the country has withstood a confluence of shocks through its appropriate policy response and recent implementation of key structural reforms to stimulate exports, spur foreign investment, and raise growth potential,” he added.
He also touted the projection of the World Bank, which said that the Philippines will have the fastest growing economy among Asian countries in the East Asia and Pacific region and that its economy will further accelerate in 2024.
He also noted the confidence of credit rating agencies and market analysts to the country’s macroeconomic fundamentals, as well as the Fitch Ratings’ forecasts that the Philippines’ “growth over the medium term will be considerably stronger than the median of similarly-rated peers.”
Diokno said the Philippine economy will remain robust as it will likely grow close to the low end of the 6.0 to 7.0 percent growth rate for 2023, noting several factors such as the country’s bright jobs market, strong manufacturing sector, sound fiscal policy, well-performing monetary policy and financial sector, improving external sector, and continuing digitalization.
“It will be continually buoyed by robust domestic demand, supported by the further easing of inflation, lowest unemployment rate, and strong inflows of remittances from overseas Filipinos (OF). The acceleration in government spending will also push growth as we expedite the implementation of catch-up plans, programs, and projects, particularly on infrastructure, as prioritized in the EDG discussions,” he said.
“Inflation is on the mend. The inflation has been decelerating despite price pressure being a global issue in 2023. This proves the effectiveness of aligned monetary and fiscal policies as well as the efficacy of direct measures to augment domestic supply, address logistical bottlenecks, and arrest uncompetitive practices in key commodity markets,” he added.
The country’s inflation rate settled at 3.9 percent in December 2023, far lower than the 4.1 percent during the month prior. It is attributed to the lower year-on-year inflation rates in key sectors, specifically housing, water, electricity, gas, and other fuels as well as food and non-alcoholic beverages.
The average inflation for 2023 stood at 6.0 percent, which is far beyond that two to four percent inflation target of the administration. (TPM/SunStar Philippines)