Bank of the Philippine Islands (BPI) projects a 6.3% economic growth for the domestic economy in 2023, driven by increased spending as inflation decelerates further.
BPI’s chief economist, Jun Neri, stated that consumers are expected to consider discretionary spending as inflation slows down.
BPI’s growth forecasts align with the government’s assumptions.
The resiliency of the US economy is seen as a positive factor for domestic output, considering the US is a major trading partner of the Philippines.
Despite a slower expansion following consecutive quarters of strong growth, analysts view the economy’s performance as robust, despite elevated inflation rates.
Inflation has shown signs of moderation, with expectations of meeting the government’s target range in the last quarter of the year.
The Bangko Sentral ng Pilipinas (BSP) has more flexibility for rate cuts compared to the US Federal Reserve, although the differential between the two countries’ rates must be considered.
Factors such as the current account deficit and export performance will influence the BSP’s decisions.
Recent revisions to the country’s balance of payment outlook include a lower projection for the current account deficit, attributed to increased travel receipts and the expansion of the business process outsourcing sector.