Philippine Economy Expands in Q4 2023, Slower Growth Expected in 2024

The Philippine economy experienced expansion in the fourth quarter of 2023 compared to the previous year, although at a slightly slower pace than the preceding three months. Various sectors played a significant role in driving this progress.

Q4 GDP Growth

Sectorial Performance

The data revealed that the services sector, which encompasses trade of goods and typically accounts for over half of the economy, recorded growth of 7.4% in the fourth quarter compared to the same period in the previous year. In addition, the industry sector, consisting of manufacturing and construction, expanded by 3.2%, while the agriculture sector witnessed a growth of 1.4%.

Projections for 2024

Despite the positive growth figures, some economists anticipate a slower pace of expansion in 2024 due to potential effects stemming from interest-rate hikes and decreased government spending.

Monetary Policy and Inflation

For now, the country's central bank has maintained its policy rate at 6.50% following an out-of-cycle meeting held in October. In December, the consumer-price index experienced a year-on-year increase of 3.9%, falling within the central bank's inflation target range of 2%-4%. Comparatively, there was a 4.1% inflation increase observed in November.

It is important to monitor these factors closely as they may impact the future trajectory of the Philippine economy.