Growth may miss lower 2024 goal

MANILA, Philippines   -Growth next year is still projected to miss even the government’s already watered-down goal for 2024, a unit of S&P Global said, adding that the economy is nevertheless poised to continue getting all the much-needed support from consumption.

In a commentary, S&P Market Intelligence said it forecasts the Philippines’ growth to clock in at 5.6 percent next year, helped by “sustained strong private consumption spending, an upturn in government infrastructure spending and improving remittance inflows.”

If realized, the 2024 growth would miss the Marcos administration’s downwardly revised target of 6.5 to 7.5 percent.

“Sustained remittance inflows from workers abroad, fast-growing IT-BPO sector exports and the continued recovery of the tourism sector are also expected to support economic growth momentum during 2024,” S&P said.

The government’s less upbeat outlook next year was expected. At present, the biggest worry for the government is the prolonged El Niño dry spell, which is predicted to last until the second quarter of 2024 and hit 65 provinces in the country, or 77 percent of all provinces in the Philippines. Another challenge for the economy is the high interest rate environment that could hurt consumption and investments.

READ: PH among nations most at risk to El Niño

Doable 2023 target?

With the year-to-date average growth now at 5.5 percent, the economy would have to expand by 7.2 percent in the fourth quarter to attain at least the low end of the government’s 6 to 7 percent growth target for 2023.

In an interview, Secretary Arsenio Balisacan of the National Economic and Development Authority said the growth target for this year is still doable, thanks to easing inflation and slight dip in unemployment.

READ: PH may deliver GDP close to 6% minimum growth target this year

Over the next decade, S&P said the Philippines economy is forecast to continue to grow rapidly, with total gross domestic product seen increasing from $440 billion in 2023 to $800 billion in 2030.

By 2033, S&P said the Philippines is forecast to become one of the Asia-Pacific region’s 1 trillion-dollar economies, joining mainland China, Japan, India, South Korea, Australia, Taiwan and Indonesia in this grouping of the largest economies in the Asia-Pacific. INQ