PH economy robust despite external risks

By Julito G. Rada

In a statement over the weekend, Diokno cited the country’s strengths that enabled it to weather the impact of the global health crisis since it struck in early 2020.

“The global economic outlook for 2023 to 2024 remains bleak. This is due to the compounding effects of the recent banking turmoil, high inflation, Russia-Ukraine war, and lingering impacts of the pandemic,” he said.

The International Monetary Fund forecasts world economic growth to slow down from 3.4 percent in 2022 to 2.8 percent in 2023, before slightly improving to 3.0 percent in 2024. This projection is much lower relative to pre-pandemic global output averaging 3.7 percent from 2010 to 2019.

He said the bleak global economic outlook for 2023 was largely due to the weak economic growth of some advanced and major economies – including the US, UK, Germany, Japan, and China – in the first quarter of the year.

The weak global outlook has also affected the Philippines’ near-term economic trajectory.

“But our macroeconomic fundamentals remain intact and we are poised to outperform our regional peers,” Diokno said.

The Philippine economy grew by a robust 6.4 percent in the first quarter of this year despite an uncertain global outlook and elevated inflation. This came on the heels of a recordhigh 7.6 percent full-year growth in 2022.

“Our growth is supported by domestic demand, which contributed 8.3 percentage points to the real GDP growth. The contribution of domestic demand is led by household consumption at 4.8 percentage points, fueled by improving labor conditions and pent-up demand. Investments or gross fixed capital formation contributed 2.6 percentage points, driven by construction,” he said.

On the fiscal side, Diokno said revenue collections for the first five months improved to P1.6 trillion pesos, up by P155.6 billion or 10.8 percent compared to the same period last year.