2024.01.3106:22:00UTC+00Philippine GDP Expands More Than Forecast

The Philippine economy expanded more than expected in the fourth quarter driven by investment and household spending but the full year growth missed the government target.

Economic growth moderated to 5.6 percent in the fourth quarter from 6.0 percent in the preceding period. However, this was better than the expected expansion of 5.2 percent.

On a quarterly basis, gross domestic product advanced 2.1 percent, which was weaker than the 3.8 percent rise in the third quarter but above economists' forecast of 1.4 percent.

However, the full-year growth missed official estimate. The economy grew only 5.6 percent in 2023, down from 7.6 percent in the previous year. The government had estimated 6 percent to 7 percent growth for 2023.

On the expenditure-side, household consumption advanced 5.3 percent annually but slightly slower than the 5.1 percent rise in the third quarter. Gross capital formation rebounded 11.2 percent after a 1.4 percent drop.

Government spending decreased 1.8 percent, reversing a sharp 6.7 percent rise a quarter ago.

Regarding foreign trade, data showed that exports slid 2.6 percent, offsetting the 2.6 percent rise in the prior quarter. By contrast, imports gained 2.9 percent, reversing to the 1.1 percent fall in the third quarter.

With the drag from higher interest rates yet to filter through the economy in its entirety and global demand likely to weaken, below trend growth is likely over the coming quarters, Capital Economics' economist Shivaan Tandon said.

The International Monetary Fund forecast the Philippine economy to grow 6.0 percent this year and 6.1 percent next year.