Philippine Economy Set for Boost in 2024 Due to High Employment and Lower Inflation

MANILA, Philippines – The Philippine economy is poised for accelerated growth in 2024, driven by easing inflation and a record-high employment rate, which are expected to enhance consumer spending significantly.

According to Philippines News Agency, published by First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P), the combination of an all-time high in employed persons, a record-low unemployment rate, and milder inflation will empower consumers with increased purchasing power this year. The report highlights a significant decrease in the unemployment rate to 3.1 percent in December of the previous year, marking the lowest level since 2005, while the employment rate surged to 96.9 percent.

Furthermore, headline inflation continued its downward trend to 2.8 percent in January of this year, remaining well within the Bangko Sentral ng Pilipinas’ (BSP) target range of 2 to 4 percent. FMIC and UA&P project that inflation will average around 3.8 percent throughout the year, as slightly lower crude oil prices and better harvests in the second half of the year are expected to temper rice price increases.

“The economy had a fast start in 2024, buoyed by new record employment levels and all-time lows in unemployment as the previous year concluded,” the report detailed. It further noted that these positive employment and inflation trends, combined with continued government spending on infrastructure, are anticipated to significantly boost consumer spending.

FMIC and UA&P also mentioned that infrastructure spending is expected to remain above 5.0 percent of GDP, supported by a lower debt-to-GDP ratio of 59.0 percent, which provides some fiscal leeway. In addition to these growth drivers, the report anticipates an acceleration in manufacturing growth.

Overall, the Philippine economy is forecasted to expand by at least 6.0 percent this year, improving from a 5.6 percent growth rate last year, as per FMIC and UA&P’s analysis.