MANILA — The Philippines is expected to be among the “key growth outperformers” in Asia-Pacific this year, primarily due to rising exports, a bump in state-led infrastructure spending, and robust growth in tourist arrivals, according to Moody’s Analytics.
“Indonesia, the Philippines, and India are key growth outperformers. Indonesia and the Philippines benefited from a recovery in export and domestic demand, with better tourist arrivals and government spending on infrastructure providing an added lift,” the report said on Thursday.
The ratings agency added in a report that the growth in the Philippine economy should continue to surpass prepandemic levels this year.
The Philippines penciled in a 5.7-percent growth in the first quarter this year, while Indonesia and India recorded a 5.1-percent and 7.8-percent expansion, respectively.
Outpacing regional growth
The country is thus on track to hit the growth target this year of between 6 and 7 percent, outpacing the expansion in Asia-Pacific of just 4 percent.
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High inflation and lending rates continue to weigh on economic expansion, although government economic planners believe that the escalation in the prices of basic commodities should settle comfortably within the target for the year of 2 to 4 percent.
This should then bump up in the succeeding quarters the increase in household spending, which accounts for more than 70 percent of economic output.
From January to March this year, this segment grew by just 4.6 percent, the slowest rate since the COVID-19 pandemic hit in 2020, according to the Philippine Statistics Authority. This should accelerate toward the end of the year with more benign inflation and the expected cut in borrowing costs.
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Infrastructure spending, meanwhile, climbed by 15.1 percent to P96.3 billion in March, data from the Department of Budget and Management showed.
Exports were likewise a bright spot, surging by 26.4 percent year-on-year amid higher sales of electronic products in April.
Tourism receipts are also contributing to the country’s economic output with visitor arrivals in the first five months totaling 2.56 million, up by 14 percent compared to 2.25 million seen in the same period last year, according to data from the Department of Tourism.