For this year and 2025, Moody’s Ratings projects the Philippines will end up as the 2nd fastest growing economy in Southeast Asia, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE PHILIPPINES is projected to be the second-fastest growing economy in Southeast Asia this year and in 2025 as domestic demand is expected to remain resilient, according to Moody’s Ratings.
“We have kept unchanged our 2024 and 2025 forecasts for the Philippines and Malaysia and also expect sequentially higher growth in both countries. Domestic demand remains the primary economic growth engine for the Philippines,” it said in a report.
Moody’s Ratings kept its forecast for gross domestic product (GDP) growth for the Philippines at 5.9% this year and 6% in 2025.
However, these projections fall short of the government’s growth targets of 6.5-7.5% for this year and 6.5-8% for next year.
At 5.9%, the Philippines has the second-fastest projected growth in Southeast Asia for 2024, after Vietnam (6%). It is ahead of Indonesia (5%), Malaysia (4.5%) and Thailand (2.8%).
For 2025, the Philippines is again expected to post the second-fastest growth behind Vietnam (6.5%) but ahead of Indonesia (5%), Malaysia (4.8%), and Thailand (3%).
Moody’s Ratings said that growth in domestic demand-driven countries like the Philippines is “increasing more than we previously expected.”
The economy grew by a weaker-than-expected 5.6% in 2023, slower than the 7.6% expansion in 2022 and short of the 6-7% government goal.
Household consumption typically accounts for three-fourths of the Philippine economy. Last year, household spending expanded by 5.6%, much slower than 8.3% in 2022.
Meanwhile, Moody’s Ratings sees inflation averaging 3.8% this year, higher than the Bangko Sentral ng Pilipinas’ (BSP) 3.6% full-year forecast but within the 2-4% target.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that strong household consumption alone can help the Philippine economy grow stronger than what Moody’s Ratings projected for 2024 and 2025?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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