In 2023, the Philippines demonstrated robust economic performance, achieving a noteworthy full-year gross domestic product (GDP) growth rate of 5.6 percent. This surpassed the growth rates of key Asian economies, including China (5.2 percent), Vietnam (5.0 percent), and Malaysia (3.8 percent), as indicated by the latest available data.
The Philippines’ GDP outcome for 2023 not only outpaced its regional counterparts but also exceeded or aligned with the projections of esteemed institutions and private analysts. Notable entities, such as the International Monetary Fund (IMF), the ASEAN+3 Macroeconomic Research Office (AMRO), and the World Bank (WB), either matched or fell short of the Philippines’ economic performance predictions.
GDP represents the total value of goods and services produced within a country during a specific period and serves as a crucial metric for economists and policymakers to gauge a nation’s economic size and well-being, facilitating comparisons across different countries.
Strength in Domestic Demand
In the final quarter of 2023, the Philippine economy surged by 5.6 percent, despite challenges such as elevated inflation and external pressures, driven by robust domestic demand.
The vigor in domestic demand was apparent in heightened household consumption and increased investments, particularly in public infrastructure, showcasing the positive outcomes of the Build Better More Program and its substantial multiplier effect on the economy.
A resilient household consumption pattern mirrored strong spending, buoyed by a thriving job market, steady inflows of remittances from overseas Filipinos, and a surge in the demand for various goods and services.
“The strong economic performance in 2023 is a clear testament to the government’s efforts in creating an environment conducive to enhancing the purchasing power of Filipinos. We are firm in our commitment to ensure that our economic progress is felt in the day-to-day lives of our people,” Finance Secretary Ralph G. Recto said.
Simultaneously, the preliminary debt-to-GDP ratio for the full-year GDP in 2023 stood at 60.2 percent, showcasing an enhancement compared to the 60.9 percent reported in 2022 and surpassing the Medium-Term Fiscal Framework (MTFF) target of 61.2 percent.
“Our debt right now remains at a very manageable level, and we are on track to bringing down the debt-to-GDP ratio to less than 60 percent by 2025. We have a sound and prudent strategy in place to effectively manage our debt and financing requirements,” Secretary Recto said.
2024 Economic Outlook
The government envisions accelerated GDP growth ranging from 6.5 to 7.5 percent in 2024, despite facing challenges from both domestic and external fronts.
Continuous efforts will be dedicated to implementing strategies that foster economic growth, ensuring that the Philippines stays aligned with its medium- to long-term objectives.
Secretary Recto highlighted the immediate priority of the government, which is to initiate the Reduce Emerging Inflation Now (REIN) campaign, aiming to stimulate private spending.
Scheduled for February 16, 2024, the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO), co-chaired by the Secretaries of the Department of Finance (DOF) and the National Economic and Development Authority (NEDA), will convene to synchronize initiatives for the prompt implementation of direct measures aimed at curbing both food and non-food inflation.
“Ensuring that prices of goods remain stable and affordable is crucial to further grow the economy, consequently enabling us to boost revenue collection,” Secretary Recto said.
The head of Finance is striving to attain the 2024 revenue collection goal of PHP 4.3 trillion by enhancing the efficiency of tax administration. This goal is further supported by actively promoting the approval of the Department of Finance’s (DOF) streamlined priority tax measures. These measures are designed to promote fiscal sustainability without hindering economic growth or worsening inflation.
In addition to these measures, the government will proficiently administer its 2024 budget by guaranteeing the punctual execution of projects, preventing any instances of government underspending. This commitment enables the government to adhere steadfastly to its promise of delivering high-impact infrastructure projects.
These efforts will be reinforced through collaborations with local government units and an enhanced focus on governance, particularly in areas such as regulatory quality, voice and accountability, and the control of corruption.
Read the official press release here: https://www.dof.gov.ph/phs-full-year-2023-gdp-growth-strongest-among-major-asian-economies/