PH Economy Grows by 5.6% in 2023;
Below Government Target

31 January 2024 — The Philippine economy grew by 5.6% in the 4th quarter, resulting in a 5.6% expansion for the whole of 2023. This compares with median estimates of 5.7% for the quarter and 5.5% for the year, according to BusinessWorld, and a revised 6% increase in the third quarter. The government’s target for 2023 was 6% to 7%. The new government target for 2024 has been set at 6.5% to 7.5%%.

On the demand side, Government Spending contracted by 1.8% after growing 6.7% in the third quarter. Household Spending grew 5.3% from 5.1%. Investment (gross capital formation) expanded 11.2% after slipping 1.4% in the third quarter. Exports of goods and services contracted 2.6% while imports of goods and services expanded to 2.9%.

On the supply side, Services grew 7.4%, Industry 3.2%, and Agriculture 1.4%.

According to the World Bank’s latest Global Economic Prospects report, prospects for economic growth for 2024 are expected to be even slower. The World Bank said they are expecting “the slowest half-decade of GDP growth in 30 years”. This is due to continued geopolitical tensions, tight financial conditions, and slow global trade. The report said that global growth is expected to contract from 2.6% in 2023 to 2.4% in 2024 as global trade growth slows. It said global trade this decade is expected to grow by half the rate in the previous decade, in part due to the pandemic. However, the World Bank also noted that strong domestic demand and private consumption will drive growth in East-Asia Pacific countries.

To sustain continuous growth of the economy, Sec. Balisacan emphasized that “nothing less than massive sustained investment is needed to achieve high quality job-creating growth and inclusion.” In order to attract investors, Balisacan said that the government will exert efforts in attracting investors through “[improving] the ease of doing business through digitalization, continuous streamlining of policies and regulations, accelerate the execution of game-changing infrastructure projects, facilitate more private investment in energy and telecommunications, and up skill our workforce.”