Thursday, April 18, 2024


Where your horizon expands every day.


It is improbable that PHL will reach its growth target for 2024.


Written by Keisha B. Ta-asan at the age of 15.Reporter

It is improbable that THE PHILIPPINES will achieve its goal of 6.5-8% growth in gross domestic product (GDP) by 2024 due to elevated borrowing expenses and a deteriorating trade forecast.

According to BMI Asia Country Risk Analyst Shi Cheng Low, our projections anticipate an increase in Philippine economic growth from 5.3% in 2023 to 6.2% in 2024. However, these projections are not as positive as the government’s forecast of 6.5-8%.


He observed a less promising business forecast and increased interest rates in order to control the growing inflation.fl

There are two main challenges that will hinder the growth of the economy in the coming year: inflation and stagnation.

Mr. Low stated that the decline in the trade cycle is expected to continue. The growth of the United States and Mainland China, which are the Philippines’ two biggest partners, is projected to decrease next year, thereby restricting any potential increase in exports.

During a webinar on Tuesday, Mr. Low stated that the economy of the United States could potentially experience a slight recession in the second and third quarters of 2024. He also mentioned that China’s economic growth rate may decrease from 5.2% this year to 4.7% in 2024.

The Development Budget Coordination Committee predicts a 1% increase in goods exports and a 2% increase in imports for this year. From 2024 to 2028, exports are expected to remain steady at 6%, while imports are projected to have an annual growth of 8%.

Mr. Low stated that the BSP will probably continue to uphold its hawkish position. fi the

The first half of 2024, like in the
flation remains elevated.

“The central bank is expected to resume its tightening cycle due to rising price pressures. It is now believed that a potential 25 basis point (bps) increase may occur at the November meeting,” stated the speaker.

– Adjust the frequency of interest rate increases if inflation continues to rise.

“However, we anticipate that the tightening period will not extend much further beyond that,” stated Mr. Low.


The BSP has maintained the key interest rate at 6.25%, which is the highest it has been in 16 years, for the past four meetings in order to control inflation.fl

The increase in borrowing rates has been 425 basis points between May 2022 and March 2023.

BMI expects Philippine inflation to average around 3.6% next year, well within the 2-4% target band of the BSP, but a tad higher than the central bank’s 3.5% forecast for 2024.

However, it should be noted that there is a higher likelihood of risks on the positive side due to the El Niño phenomenon and the potential for the Hamas-Israel conflict to cause an increase in price volatility, according to Mr. Low.

Additionally, Robert Dan J. Roces, the Chief Economist of Security Bank Corp., stated that there is a possibility of another increase in interest rates.ff

While it may help stabilize prices and bolster the local currency’s value against the dollar, it could also impede economic growth and place a heavier financial burden on borrowers by increasing debt costs.

In a message on Viber, he stated that achieving a balance between controlling inflation and promoting economic growth requires a multifaceted strategy. Along with increasing interest rates, policymakers may also want to consider implementing supply-side policies, providing fiscal stimulus, and intervening in foreign exchange markets as potential solutions.

According to Mr. Roces, a careful strategy that avoids increasing monetary restrictions may be “wiser” when handling inflation, considering the potential impact on economic growth.

BMI’s Mr. Low stated that the BSP will be cautious about excessive tightening, particularly due to the noticeable decline in investment shown in the most recent growth data.

first quarter.

The economy of the Philippines expanded by 4.3% in the second quarter, which marks the slowest growth rate in more than two years. This growth was lower than the 6.4% recorded in the first quarter.first quarter.

The average GDP growth for the initial semester was 5.3%.

first quarter

In the second quarter, there was a decrease of 0.04% in gross capital formation, which is a turnaround from the 12.6% increase seen in the first

In the first quarter of 2022, there was a 17.2% increase compared to the second quarter of 2022.

The third quarter Gross Domestic Product (GDP) figures are scheduled to be unveiled on November 9th.

According to Mr. Low, we anticipate that rate decreases will occur in the latter half of 2024, following our predictions for the Federal Reserve. This indicates that interest rates will remain at elevated levels for an extended period.

During their most recent gathering, the US Federal Reserve maintained their policy rates at a steady range of 5.25-5.5%.