inflation – Page 5 – Author Carlo Carrasco

Moody’s Ratings sees the Philippines becoming the 2nd fastest growing Southeast Asian economy this year and in 2025

April 15, 2024April 3, 2024carlocarrasco

For this year and 2025, Moody’s Ratings projects the Philippines will end up as the 2^nd 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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Sun Life Investment Management and Trust Corporation (SLIMTC) anticipates strong Philippine economic growth for 2024

March 4, 2024February 23, 2024carlocarrasco

As far as Sun Life Investment Management and Trust Corporation (SLIMTC) is concerned, the Philippine economy can achieve strong growth this year with favorable economic factors supporting it, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news report. Some parts in boldface…

The government’s 6.5 to 7.5 percent economic growth target for this year is attainable as the projected decline in interest rates will help boost consumption and investments, a top official of Sun Life Investment Management and Trust Corporation (SLIMTC) said on Thursday.

“It seems like it’s something that’s still attainable. Let’s see when rate cuts are there and especially when those infrastructure projects are in,” said SLIMTC Chief Investment Officer Ritchie Teo in a briefing at the Milestone Building in Bonifacio Global City in Taguig City.

According to Teo, the Bangko Sentral ng Pilipinas (BSP) is projected to cut rates by a total of 100 basis points this year as inflation continues to ease.

Headline inflation, which reached 6 percent in 2023, is projected to settle at 3.8 percent this year.

Teo said the BSP will likely wait for the US Federal Reserve to slash interest rates thus, the first rate cut is forecast to happen around June or the early part of the second half of the year.

“Probably good to say they will only cut when Fed cuts. They will wait for Fed so probably that’s on the latter part. Not in April, maybe in June or early second half,” said Teo.

SLIMTC expects the US Federal Reserve to cut policy rates by 75 to 100 basis points by mid-year as US inflation returns to target.

“They [BSP] will leave some [easing] on the latter part of the year mainly because of risks like the November election. So it’s good to have something on the table,” he added.

Teo said the lower interest rates will boost consumption and private investments, which in turn will help accelerate the country’s economic growth.

“Based on the latest gross domestic product (GDP) forecast, we anticipate 6% growth for 2024, largely driven by higher consumption and private investments,” he said.

Government spending especially on infrastructure projects is also expected to be one of the major growth drivers for this year.

“If you look into the investment side, maybe more on the government, given that they’ve been trailing but for the private investments, especially with the rate cuts, again their spending will improve because with the higher interest rates, some are really holding back,” said Teo.

Let me end this piece by asking you readers: What is your reaction about this recent development? Do you think easing inflation, lower interest rates and strong consumption will be enough to help the Philippine economy grow by at least 6% this year?

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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Philippine economy grew by 5.6% in 2023

February 3, 2024January 31, 2024carlocarrasco

The results are finally in. The economy of the Philippines grew by 5.6% for the year 2023 and this was short of the government’s own declared target of 6% to 7%, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA news report. Some parts in boldface…

The Philippine economy grew slower at 5.6% in year 2023, falling short of the government’s target as elevated interest rates resulting from high inflation environment dampened consumption, according to data released by the Philippine Statistics Authority (PSA) on Wednesday.

The economy, as measured by gross domestic product (GDP) or the total value of goods and services produced in a period, grew by 5.6% from October to December 2023, PSA chief and National Statistician Claire Dennis Mapa said at a press conference.

This is slower than the 7.1% growth rate seen in the fourth quarter of 2022. It is also a deceleration from the upwardly revised third quarter 2023 GDP growth rate of 6%.

The fourth quarter economic performance brought the full-year 2023 economic growth rate to 5.6%, slower than the 7.6% full-year 2022 GDP growth.

This is below the government’s target range of 6% to 7% for 2023’s full-year GDP growth.

“While this growth is below our target of 6 to 7% for this year, this keeps us in the position of being one of the best-performing economies in Asia,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said during the press briefing.

Comparing the growth rates of neighbors in the region, the Marcos administration’s chief economist said the Philippines’ fourth quarter growth surpassed that of China (5.2%) and Malaysia (3.4%) while falling behind Vietnam (6.7%).

“More importantly, our full-year GDP for 2023 is now 8.6% higher than pre-pandemic levels,” Balisacan said.

High inflation, interest rates – The NEDA chief said the slowdown seen in 2023 could be attributed “possibly to effects of past interest rate increases.”

The Bangko Sentral ng Pilipinas’ policy-setting Monetary Board has raised the benchmark interest rate by 450 basis points since May 2022 to temper inflation, which resulted from global supply disruptions and economic uncertainty following Russia’s full-scale attack and invasion of Ukraine since February 2022.

Notably, the Philippines’ full-year inflation — which measures the rate of increase in the prices of goods and services — accelerated to 6% from 5.8% in 2022.

“The impact of inflation is on Household final consumption expenditure. We saw the impact on food expenditure… directly affected by inflation,” Mapa said.

Spending on food for the whole year grew at 8.1%, slower than 12.4% in 2022.

“We are concerned about the low growth in real spending on food due to high food prices, though it has moderated in recent months,” Balisacan said.

Meanwhile, household final consumption expenditure decelerated to 5.3% from 7% in the previous quarter in 2022.

For the whole year, household spending slowed down to 5.6% from 8.3% in 2022.

“The government will be relentless in managing inflation, especially for basic commodities such as food. Our efforts include improving the efficiency and building resiliency of the agriculture value chain, utilizing strategic trade policy when domestic production is inadequate, and establishing mechanisms to empower consumers to exercise their market power to combat inflation,” Balisacan said.

Likewise, government final consumption expenditure contracted by 1.8% in the fourth quarter, from 3.3% growth in the same period in 2022.

Full year, government spending grew 0.4%, slower than the 4.9% growth in 2022.

Balisacan said the decline in state spending last year was “largely due to the fiscal consolidation program.”

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think 2024 will be a better year of growth for the Philippine economy? Do you think more government spending will boost economic growth without adding much to inflation?

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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BSP sees inflation landing below 4% this year

February 2, 2024January 24, 2024carlocarrasco

The way the Bangko Sentral ng Pilipinas (BSP) sees it, the inflation rate of the Philippines will end up at less than 4% this year although there could be external developments that might alter things, according to a Manila Bulletin news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news report. Some parts in boldface…

The Bangko Sentral ng Pilipinas (BSP) expects the inflation rate to fall below four percent this year due to base effects, and is eyeing a lower January 2024 consumer price index (CPI) versus December’s actual 3.9 percent.

BSP Governor Eli M. Remolona Jr. said the base effects will push inflation rates lower for the months of January and February, and for the first quarter on average. They also expect CPI to climb back up after the first three months.

When asked if he sees a below four percent inflation by end-2024, the BSP chief said it is “very likely if you look on a month-on-month basis, it will moderate,” he said in a mix of Filipino and English. “So you have to adjust on base effects,” he added.

The central bank will revise the current 4.2 percent risk-adjusted inflation forecast for 2024 on Feb. 15 to below four percent, said Remolona. “(It’s) very likely,” he said, citing again, the base effects.

The Monetary Board’s first policy meeting this year is scheduled on Feb. 15. The hawkish BSP has kept a tight policy stance of 6.5 percent since October last year.

Meanwhile, the BSP will announce its month-ahead CPI forecast for January on Tuesday, Jan. 30.

According to Remolona, “I think it will be lower (from 3.9% December) because of base effects.”

BSP Deputy Governor Francisco G. Dakila Jr. said upside risks to inflation continue to evolve, and they now include the Red Sea crisis as another factor to their risk-adjusted inflation forecast. The Red Sea conflict centers on the Houthi rebel attacks which disrupted the trade routes in the Suez Canal. This affects the Philippines because oil imports bound for the country passes through the Suez Canal.

The changing labor conditions in the country is another upside risks that could be more of a risk than expected, according to Dakila.

The slowing growth in the global economy, and this already includes China, is a previously cited downside risk to inflation. The El Nino weather phenomenon – originally estimated to last only until March this year, is now expected to extend until the second quarter 2024.

The biggest upside risks to the inflation outlook is the spillovers such as second-round effects. This is electricity rates, transport fare hikes and wage increases.

As for the economy, Remolona said he has more confidence now that the economy will perform better this year.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think inflation here in the Philippines will land below 4%? Do you think that developments overseas could cause a spike in inflation in our country in the months ahead?

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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NEDA projects 2023 Philippine economic growth at 6%

December 13, 2023December 10, 2023carlocarrasco

As the 2023 is coming to an end, the National Economic and Development Authority (NEDA) expressed confidence that the economy of the Philippines will achieve 6% growth this year, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news report. Some parts in boldface…

The National Economic and Development Authority (NEDA) is positive the country will hit the low end of its economic growth target at 6 percent by the end of the year.

“For the year, ang expectation namin is we will hit the low end of the target. If not, close to it (our expectation is that we will hit the low end of the target. If not, close to it). The low end of the growth target is at 6 percent, so either a 6 or very close to that,” NEDA Undersecretary Rosemarie Edillon said at the Saturday News Forum in Quezon City.

The Philippine economy posted the strongest third-quarter growth of 5.9 percent among major Asian economies, bringing the gross domestic product (GDP) expansion for the first nine months of 2023 to 5.5 percent.

Vietnam recorded 5.3 percent, Indonesia and China 4.9 percent, and Malaysia 3.3 percent during the third quarter.

Looking at the Purchasing Manager’s Index (PMI) as one indicator, Edillon said she is optimistic the GDP forecast is achievable.

She also noted the October unemployment data, which fell to 4.2 percent from 4.5 percent during the same month last year.

“Nakita namin na maganda rin naman ang employment numbers natin at ‘yung PMI, nakita namin na mataas pa rin naman siya (We saw that the employment numbers and the PMI are high),” she said. “We are actually hopeful for the rest of the year but especially going forward.”

Edillon said they observed a rise in the number of jobs generated in accommodation establishments, restaurants, transportation, and the information technology – business process outsourcing fields.

She also pointed out the gradual recovery of sectors severely hit by the pandemic, especially the tourism industry, which already surpassed its targeted 4.8 million foreign visitors.

Before the pandemic, the tourism industry’s share in the country’s GDP was estimated at 12.7 percent.

Improved inflation

In the same forum, she took note of the improving inflation rate, which further eased to 4.1 percent in November from 4.9 percent in October.

Food inflation at the national level decelerated further to 5.8 percent in November 2023 from 7.1 percent the previous month.

“(M)agandang balita ito kasi, especially iyong mga food item na binabantayan natin — kunwari iyong pork meat, iyong sugar, iyong mga vegetables — bumaba po iyong presyo nitong mga ito (This is good news, especially with regard to the food items that we are monitoring – the prices of pork meat, sugar, and vegetable went down),” she said.

Edillon said the cost of rice still rose but this could be attributed to the slowdown in importation due to tightening supply in the world market.

“Iyong sa ibang mga bansa, nag-i-expect kasi sila ng impact ng El Niño. Pero ang tingin naman namin, dahil we think that they have been prepared for this so mukhang it will correct actually (Other countries are bracing for the impact of El Niño. But we think because they’re already prepared for it, it will be corrected eventually),” she said.

Still, she said she believes the price cap imposed by President Ferdinand R. Marcos Jr. in September contributed to the lower inflation rate.

Let me end this piece by asking you readers: What is your reaction to this recent development? Are you convinced that the Philippines will be able to achieve 5

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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Philippine inflation eases to 4.1% in November 2023

December 11, 2023December 6, 2023carlocarrasco

Inflation here in the Philippines continued to drop and eventually landed at 4.1% for the month of November 2023 and there were several factors behind it, according to a Philippine News Agency (PNA) news report.

To put things in perspective, posted below is an excerpt from the PNA news report. Some parts in boldface…

The country’s headline inflation further eased to 4.1 percent in November this year, the lowest recorded since the 4 percent in March 2022, the Philippine Statistics Authority (PSA) said.

In a briefing on Tuesday, National Statistician Dennis Mapa said the headline inflation last month was significantly lower than the 8 percent recorded in November last year and the 4.9 percent seen in October this year.

Core inflation, which excludes volatile oil and food items, also decelerated to 4.7 percent from 5.3 percent in October.

PSA data shows the downtrend was primarily brought about by the lower year-on-year growth rate of the heavily-weighted food and non-alcoholic beverages at 5.7 percent in November 2023 from 7 percent in October 2023.

Food inflation slowed to 5.8 percent, the lowest recorded since the 5.2 percent in May 2022.

This is due to the deflation in vegetables (-2 percent from 11.9 percent) and lower inflation of fish, meat, sugar, bread and other cereals, and fruits.

Also contributing to the downtrend in the overall inflation in November was the deflation in transportation (-0.8 percent from 1 percent) and slower inflation in restaurant and accommodation services (5.6 percent from 6.3 percent).

The restaurants and accommodation services index with a slower inflation rate of 5.6 percent in November from 6.3 percent in the previous month also contributed to the downtrend of the overall inflation.

Year-to-date, headline inflation was at 6.2 percent while core inflation settled at 6.8 percent.

Inflation in the National Capital Region (NCR) also slowed to 4.3 percent from 4.9 percent in October. For areas outside NCR, headline inflation decelerated to 4.1 percent in November from 4.9 percent the previous month. Inflation for the bottom 30 percent households also eased to 4.9 percent from 5.3 percent.

In a separate statement, the National Economic and Development Authority (NEDA) attributed the drop in inflation to the timely implementation of strategies to stabilize food supply amid the anticipated domestic and external headwinds in the coming months.

“With the right interventions in place, including the proper and timely deployment of trade policy, we are confident that we can effectively manage inflation and prevent unnecessary upticks in prices of goods and commodities to safeguard the purchasing power of Filipino families, especially those from the most vulnerable sectors,” NEDA Secretary Arsenio Balisacan said.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think inflation will ease further and go below 4% by January 2024? Does the easing of inflation make you more confident about your economic prospects for 2024?

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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Muntinlupa City Mayor visits local market and personally inspects prices of goods

October 12, 2023October 9, 2023carlocarrasco

Recently in the progressive city of Muntinlupa, Mayor Ruffy Biazon personally visited a market in Barangay Poblacion and examined the prices of goods, according to a Manila Bulletin news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news report. Some parts in boldface…

Muntinlupa Mayor Ruffy Biazon visited a market on Oct. 9 to check the prices of basic commodities.

Biazon went to a market in Barangay Poblacion to know the prevailing prices of rice, meat, vegetables and other commodities.

He said a common feedback of stall owners inside the market is the competition from sellers outside the market, which has a negative impact on their income.

“Ang common feedback ng mga nagtitinda ay ang kompetensya mula sa mga nagtitinda sa labas—yung mga nasa bangketa at nasa iba pang private properties. Hindi na kasi sila napapasok ng mga mamimili; may advantage kasi yung mga nasa labas (The common feedback from sellers is the competition from sellers outside–those who are located on the sidewalk and private properties. Consumers no longer go inside (the market); those who sell outside have the advantage),” said Biazon during his Facebook live video of his market visit.

The mayor also noted that there are vacant stalls in the market, which could be due to sellers losing out to competitors outside the establishment. Biazon said he will look into the matter of illegal vendors around the market.

“Nagkakaroon kasi ng negative impact sa market mismo. Titingnan natin ang mga umiiral na batas natin kung may magagamit tayo para tugisin ang mga illegal vendor at wala sa tamang pwesto (It has a negative impact to the market directly. We will study the existing laws if we have something to use to go after illegal vendors and those who are not in the proper places),” said Biazon.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you are a resident of Muntinlupa City, were you able to visit any local market lately? If you did, were the prices of good higher than they were six months ago? Do you wish that more your city government officials would personally visit other local markets? Do you believe that local market vendors are being harmed by vendors outside of the markets?

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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Philippine economic growth for 2023 could hit 5.5%

October 4, 2023October 2, 2023carlocarrasco

In the views of the First Metro Investment Corporation (FMIC) and the University of the Asia and the Pacific (UA&P), the economy of the Philippines could grow by 5.5% for the year, according to a news article by Philippine News Agency (PNA). 2023 has been an economically challenging year and many anticipated that the national economy won’t grow as high as it did in 2022.

To put things in perspective, posted below is an excerpt from the PNA news report. Some parts in boldface…

The Philippine economy is projected to grow by 5.5 percent this year, driven by the growth in government spending, a report released by the First Metro Investment Corporation (FMIC) and the University of the Asia and the Pacific (UA&P) said.

In the September issue of The Market Call released on Wednesday, FMIC and UA&P said Philippine economic growth in the third quarter of the year will likely reach 5.0 to 5.2 percent.

For the fourth quarter of this year, FMIC and UA&P project the country’s gross domestic product (GDP) to grow by 6 percent.

This would bring the full year GDP growth to 5.5 percent which is slightly below the government’s 6 to 7 percent target for this year.

“Despite the weak July-August, we think the NG will accelerate further its spending on infrastructure and transportation for the rest of the year, and employment will have strong rebound in September,” the report said.

The Philippine economy grew by 4.3 percent in the second quarter of this year. During the quarter, government expenditure contracted by 7.1 percent.

FMIC and UA&P however expect government spending to accelerate in the second half of the year.

“National Government took up the slack in July spending as it ramped up expenditures by 16.2 percent year-on-year in July through higher social protection and infrastructure outlays,” the report said.

Aside from government spending, FMIC and UA&P also expect manufacturing and construction to drive growth.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the national economy can do better than the 5.5% growth foreseen by the First Metro Investment Corporation (FMIC) and the University of the Asia and the Pacific (UA&P)?

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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Philippine economy grew only 4.3% in 2nd quarter

August 14, 2023August 10, 2023carlocarrasco

Achieving economic growth of 7% this year has gotten much more challenging for the Philippines as the economy grew by only 4.3% in the 2nd quarter of 2023, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA news report. Some parts in boldface…

The Philippine economy continued its downtrend as it grew at a slower pace in the second quarter of 2023 — its slowest pace in nine quarters since the country entered the positive territory in the middle of 2021 following a pandemic-induced recession— amid high inflation that tempered consumption during the period, the Philippine Statistics Authority (PSA) reported on Thursday.

The economy, as measured by gross domestic product (GDP) or the total value of goods and services produced in a specific period, grew by 4.3% during the April to June 2023 period, PSA chief and National Statistician Claire Dennis Mapa said at a press conference.

This is slower than the 6.4% growth rate seen in the first quarter of the year and far slower than the 7.5% GDP growth seen in the same quarter last year. Quarter-on-quarter, it posted a decline of -0.9% during the period.

This also marks the fifth straight quarter of deceleration for the country’s GDP, and its slowest footing in nine quarters since it exited the pandemic-induced recession in the second quarter of 2021.

The economy was pulled out of recession in the April to June period of 2021 with a GDP growth rate of 12%.

The second quarter print brought the year-to-date economic growth rate at 5.3%, according to Mapa.

To achieve the government’s 6% to 7% target, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the economy “needs to grow by 6.6% in the second half.”

“Notwithstanding the challenges, we believe this is still attainable,” Balisacan said, reading the joint statement of the economic team.

The country’s chief economist earlier floated that the second quarter GDP growth is expected to “further moderate.”

High inflation, interest rates – The slower growth came amid a still high inflation environment and the consequential costly interest rates to temper rising prices.

As of the first half of the year, inflation or the rate of increase in the prices of goods and services clocked in at 7.2%, still far above the government’s comfortable ceiling of 2% to 4%.

To tame inflation, the Bangko Sentral ng Pilipinas (BSP) raised monetary policy rates by a cumulative 425 basis points since May last year.

“For the second quarter, the moderate economic expansion was driven by increases in tourism-related spending and commercial investments, but was tempered by high commodity prices, the lagged effects of interest rate hikes, the contraction in government spending, and slower global economic growth,” Balisacan said.

Notably, Household Final Consumption Expenditure (HFCE) contracted by 0.1% quarter-on-quarter. Likewise, Agriculture, Forestry, and Fishing posted a quarter-on-quarter decline of -0.97% in the second quarter. Industry and Services sectors also saw contractions of 0.7% and 1.02%, respectively, during the period

Let me end this piece by asking you readers: What is your reaction to this recent development? What do you think must be achieved to boost economic growth for the rest of 2023? Do you think the Philippine economy will achieve growth of at least 6% by the end of this year?

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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World Bank raises forecast on Philippine economy growth for 2023

June 12, 2023June 8, 2023carlocarrasco

With the year 2023 nearing the half-way point, the World Bank revised its forecast on the Philippine economy seeing a 6% growth (versus the previous 5.4% growth forecast), according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news article. Some parts in boldface…

THE PHILIPPINE ECONOMY is likely to grow by 6% this year amid strong domestic demand and despite elevated inflation, the World Bank said, raising its forecast from 5.4% in January.

A recovery in jobs, improved consumer sentiment and strong remittances from Filipinos overseas would drive local consumption, the multilateral lender said in its Global Economic Prospects report on Wednesday.

“Despite external challenges, high domestic inflation and tight monetary conditions, domestic demand has once again remained resilient, fueling growth,” World Bank Country Director for the Philippines Ndiame Diop separately told a virtual news briefing.

The latest growth forecast is the lower end of the government’s 6-7% growth target this year. The Philippine economy grew by 6.4% in the first quarter, slower than 8% a year ago and 7.1% a quarter earlier.

“Despite weak global conditions, our upward revision reflects this continued strength in domestic demand,” World Bank Philippines Senior Economist Ralph van Doorn said.

But the potential global slowdown could still affect growth. “Although the global economy displayed remarkable resilience in early 2023, economic conditions will remain subdued for the rest of 2023,” Mr. Diop said.

He said global growth is expected to wane due to “persistent inflation, slowdown of global trade and the effect of recent monetary tightening.”

The World Bank expects global growth to slow to 2.1% this year, though this is higher than its earlier 1.7% projection. It also sees global growth reaching 2.4% next year and 3% in 2025.

“Risks remain tilted to the downside,” Mr. Diop said. “Recent episodes of market instability have raised concerns of a potential spillover. The possibility of further monetary tightening amid sticky core inflation could raise the cost of global financing and lead to a more pronounced and prolonged global slowdown.”

Persistent inflation remained a cause for concern, the World Bank said.

“Although our baseline forecast (shows) inflation will decelerate, it is still the main challenge,” Mr. van Doorn said.

The World Bank expects Philippine inflation to average 5.7% this year, higher than its earlier 4.2% forecast.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the World Bank’s analysis about economic growth for the Philippines this year? Do you think the Philippine economy can do better than expected by the end of 2023?

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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