SLIMTC Predicts 5.6% Economic Growth for Philippines in 2023

Manila – Sun Life Investment Management and Trust Corporation (SLIMTC) has forecasted an acceleration in the Philippine economy for the coming year, primarily fueled by increased consumer spending and government expenditure.

According to Philippines News Agency, SLIMTC President and Chief Investment Officer Michael Enriquez, the Philippines is expected to experience a 5.6 percent economic growth in 2023, an upgrade from the earlier projection of 4.8 percent. This revised forecast is attributed to a robust third-quarter performance, where the economy expanded by 5.9 percent. Enriquez highlighted government final consumption expenditure, which grew by 6.7 percent, as a key factor in this growth.

For the year 2024, Enriquez anticipates that consumer spending will continue to be a significant growth driver. He emphasized the role of government spending and higher exports in boosting the Gross Domestic Product (GDP). Enriquez noted a slowdown in private capital formation due to high borrowing costs, suggesting that the government should compensate for this by increasing its fiscal activity. Furthermore, he predicts a headline inflation rate of 6 percent for the current year, which is expected to decrease to 3.7 percent in the following year. With the easing of inflation, he forecasts that the Bangko Sentral ng Pilipinas might begin reducing interest rates from the second quarter of 2024, aligning with the Federal Reserve’s anticipated rate cuts in the latter half of the year.