Multilateral lenders maintain optimism for Phl

Economic growth in the Philippines is poised for a rebound in 2024 and beyond, with multilateral lenders projecting robust expansion driven by easing inflation, steady domestic demand and supportive policy measures.

- By KEISHA TA-ASAN

However, risks stemming from global and domestic challenges continue to cloud the outlook.

In its staff report for the 2024 Article IV Consultation, the International Monetary Fund (IMF) forecasts the Philippine economy to grow by 5.8 percent in 2024 and 6.1 percent in 2025, buoyed by monetary policy easing and a narrowing negative output gap.

"Consumption growth will be buoyed by lower food prices and the upcoming midterm elections, while investment growth is expected to pick up on the back of a sustained public investment push, and gradually declining borrowing costs," the IMF said.

The Philippine economy expanded by 5.2 percent in the third quarter, slower than the previous quarter's 6.4 percent growth and the six percent expansion in the third quarter of last year. For the first three quarters, the country's gross domestic product (GDP) averaged 5.8 percent.

Household consumption was the largest contributor to GDP growth, rising by 5.1 percent in the third quarter.

Strong inflows

According to the IMF, investment is projected to gain momentum through public-private partnership projects and foreign direct investments (FDIs), spurred by recent legislative reforms.

The external position is also set to improve, with a narrowing current account deficit and an anticipated uptick in tourism and remittances.

The IMF projects the current account deficit to narrow by two percent of GDP in 2024 and 1.9 percent of GDP in 2025, supported by lower commodity prices, a gradual pick-up in tourism and business process outsourcing sector receipts.