Philippine GDP to Grow Close to 6-7% Target in 2023, Marcos Says

(Bloomberg) -- Philippine President Ferdinand Marcos Jr. struck an optimistic note about the prospects of his nation’s economy, voicing confidence that the country was on track to grow close to its target this year.

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“We are confident that the country will post a full year economic growth that is close to the 6%-7% target for 2023,” Marcos said Wednesday at a briefing on the Philippine economy in San Francisco.

The Philippine economy is on track to post Southeast Asia’s quickest expansion this year after growing 5.9% on-year in the third quarter. However, softer consumer spending and a decline in investment amid high interest rates and weaker global expansion have spurred doubts that the robust growth would last.

“Inflation is slowly coming down,” Marcos said. “We are committed to arresting inflation and maintaining overall price stability through supply side interventions and demand side management measures,” he added.

Philippine inflation came in sharply slower than anticipated in October, giving policymakers reason to pause their most aggressive monetary tightening in two decades.

Read more: Philippines Set for Pause After Last Month’s Off-Cycle Rate Hike

The recent inflation numbers are “good news,” Bangko Sentral ng Pilipinas Governor Eli Remolona told reporters after Marcos spoke. “The monetary board will have a meeting tonight, we look at the data, we look at the latest expectations and will make a decision,” he said.

The Philippine central bank has said that monetary policy will remain tighter for longer until inflationary expectations are back on target. The economic impact of the country’s policy rate adjustments, which started in the second quarter of last year, is projected to peak in the second half of 2024.

Even as the Philippines grapples with lingering economic challenges, its officials remain optimistic. Infrastructure spending is targeted at 5%-6% of gross domestic product up to 2028, while the poverty rate is projected to fall to 9%.

On the security front, the president has vowed to protect the Philippine territory at all cost as tensions with China keep rising over conflicting claims in the resource-rich South China Sea.

Read more: Why US and China Compete for Sway in South Pacific: QuickTake

The Philippines and Japan earlier this month agreed to begin discussions on mutual military visits and strengthened security ties with the US amid heightened tensions with China over disputed waters.

--With assistance from Ditas Lopez.

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