The economic growth of the Philippines in the fourth quarter surpassed expectations due to a surge in investment and household spending, despite the overall annual growth falling short of the government's target. Growth slowed to 5.6 percent in the final quarter, down from 6.0 percent in the previous period, but this exceeded the anticipated growth of 5.2 percent.
When examining it quarterly, the Gross Domestic Product (GDP) increased by 2.1 percent. Although this fell short of the 3.8 percent increase in the third quarter, it exceeded economist predictions of 1.4 percent. However, annual growth did not meet the official forecast; the economy grew by only 5.6 percent in 2023, a decrease from the 7.6 percent expansion of the previous year. The government had projected a 6 to 7 percent growth for that year.
Looking at expenditure, household consumption grew 5.3 percent annually, albeit at a slightly slower rate than the 5.1 percent increase in the third quarter. Gross capital formation experienced a rebound of 11.2 percent after previously dropping 1.4 percent. In a reversal from a significant 6.7 percent increase in the previous quarter, government spending decreased by 1.8 percent.
In terms of foreign trade, data indicated that exports dropped by 2.6 percent, negating the 2.6 percent increase of the previous quarter. Conversely, imports rose by 2.9 percent, contradicting the 1.1 percent decline in the third quarter.
Economist Shivaan Tandon of Capital Economics predicts that the full impact of higher interest rates has yet to permeate the entire economy. Coupled with a likely decrease in global demand, he predicts that the economy will likely experience below-trend growth in the upcoming quarters.
The International Monetary Fund predicted that the Philippine economy would experience a growth rate of 6.0 percent this year and 6.1 percent the following year.
