Philippines records best GDP growth since 1976

The Philippines has seen one of the strongest expansions in Asia, despite facing price and interest-rate pressures, due to robust spending which has boosted growth by the most since the 1970s. According to the Philippine Statistics Authority, gross domestic product in the three months through December grew 7.2% from a year earlier, surpassing the 6.6% median estimate in a Bloomberg survey. Output also rose 2.4% compared to the previous quarter, surpassing the 1.3% forecast.

For the full year, GDP expanded 7.6% in 2022, surpassing the 7.4% survey median, and achieving the best annual performance since 1976, as noted by National Statistician Dennis Mapa. This growth can be attributed to pent-up demand that withstood the highest inflation since 2008 and the most aggressive monetary tightening in two decades, making the Philippines a bright spot in Asia. In comparison, South Korea, which also saw elevated price gains and rate increases, had a weaker performance last quarter.

President Ferdinand Marcos Jr. has stated that the Philippines is expected to continue growing at around 7% this year. Despite this positive outlook, private consumption growth did slow, remaining at 7% in the fourth quarter. However, the government is confident that a “high-growth trajectory” can be sustained. The reopening of China is also expected to be a boon for the Philippines.

While the Philippines may not be fully immune to a global slowdown, the government is optimistic about the country’s ability to sustain growth. However, some experts warn that fast inflation and tighter monetary settings could weigh on spending, and a sharp reversal in pandemic-induced demand means exports are likely to struggle. Data also showed that overseas sales contracted more than estimated in December, indicating potential challenges from slowing global growth.