Philippines: Economy likely sustained growth in 2nd quarter
MANILA, Philippines — The economy likely sustained the strong economic rebound in the second quarter with a gross domestic product expansion of between eight and nine percent after a stronger-than-expected GDP growth of 8.3 percent in the first quarter, according to Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla. “Probably eight or nine percent,’’ he said of the GDP growth.
However, Medalla told reporters that the expansion is likely to slow down in the second half.
‘’The problem is the second half will be slower,” he said.
In early July, the Cabinet-level Development Budget Coordination Committee (DBCC) again lowered its GDP growth target to a range of 6.5 to 7.5 percent from the revised seven to eight percent in consideration of recent external and domestic developments.
Originally, the DBCC was looking at a growth of between seven and nine percent this year after the country emerged from the pandemic-induced recession with a 5.7 percent GDP expansion last year.
“My own personal forecast is seven (percent) for the year,” Medalla said.
The BSP chief is concerned about the impact of the headwinds on the economic growth of emerging markets like the Philippines despite the strong growth in consumption and capital formation.
The DBCC under the Marcos administration penned a GDP growth of 6.5 to eight percent starting 2023 until 2028.
Last week, the International Monetary Fund (IMF) hiked its 2022 GDP growth forecast for the Philippines to 6.7 percent despite the expected slowdown in the second half.
IMF resident representative Ragnar Gudmundsson said the latest GDP growth projection reflected the strong recovery momentum in the first half.
Gudmundsson said the Philippines’ real GDP returned to the pre-pandemic level in the first half.
“However, the growth momentum is expected to moderate in the second half of 2022 and in 2023,” Gudmundsson said.
However, the IMF lowered its GDP growth forecast to about five percent from 6.3 percent due to external developments.
“Our growth projection for 2023 now stands at about five percent, due to base effects, the impact of the war in Ukraine, slowdown in major trading partners, faster US monetary policy tightening, and high inflation,” Gudmundsson said.