PH is predicted to be among the Asia-Pacific ‘performers’

MANILA – The Philippines is expected to be among the “leading growth performers” in the Asia-Pacific this year, largely due to rising exports, increased state-led infrastructure spending and strong growth in tourist arrivals, according to Moody’s Analytics.

“Indonesia, the Philippines and India are the best growth. Indonesia and the Philippines benefited from a recovery in export and domestic demand, with better tourist arrivals and government spending on infrastructure providing added growth,” the report said on Thursday.

The rating agency added in a report that growth in the Philippine economy should continue to exceed pre-pandemic levels this year.

The Philippines posted growth of 5.7 percent in the first quarter of this year, while Indonesia and India posted growth of 5.1 percent and 7.8 percent, respectively.

Exceeding regional growth

Thus, the country is on track to achieve this year’s growth target of between 6 and 7 percent, outpacing the Asia-Pacific expansion of just 4 percent.

READ: DOF: GDP growth target of 6-7% for ʼ24 can still be achieved

High inflation and credit rates continue to weigh on economic expansion, although government economic planners believe that commodity price inflation should be comfortably within the 2 to 4 percent target for the year.

This should then increase in the following quarters the growth of household expenses, which make up more than 70 percent of economic production.

From January to March this year, this segment grew by just 4.6 percent, the slowest pace since the COVID-19 pandemic hit in 2020, according to the Philippine Statistics Authority. This should accelerate towards the end of the year with more benign inflation and expected reductions in borrowing costs.

READ: Government infrastructure spending increased in March

Infrastructure spending, meanwhile, rose 15.1 percent to 96.3 billion in March, data from the Department of Budget and Management showed.

Exports were also a bright spot, rising 26.4 percent year-on-year amid higher electronics sales in April.

Tourism receipts are also contributing to the country’s economic output with visitor arrivals in the first five months reaching 2.56 million, up 14 percent from the first 2.25 million in the same period last year, according to data from the Department of Tourism.