Hit growth target – analysts

The economy likely slowed in the fourth quarter of 2022, but full-year growth would still reach the upper end of the government’s target, analysts polled by the Manila Times said.

Growth estimates for the fourth quarter from five economists resulted in a median forecast of 6.9 percent, down significantly from the expansions of 8.2 percent, 7.5 percent and 7.6 percent recorded in the first, second and third quarters, respectively.

Their average forecast for the full year was 7.5 percent, at the higher end of the government’s target for 2022 gross domestic product growth of 6.5 to 7.5 percent.

Economy managers said growth in 2022 will exceed target, particularly in the wake of a better-than-expected third quarter.

Finance Minister Benjamin Diokno. Photo from the Finance Department’s Facebook page

Finance Minister Benjamin Diokno. Photo from the Finance Department’s Facebook page

“We expect the economy to grow at least 7.5 percent last year,” said Finance Minister Benjamin Diokno, speaking in Davos, Switzerland, last week.

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Growth of 7.5 percent or better would be the highest in more than 45 years or 8.8 percent since 1976 based on World Bank data.

The last time growth reached 7.0 percent was in 2016 when it reached 7.1 percent, and it subsequently slowed to 6.9 percent, 6.3 percent and 6.1 percent over the next three years before contracting to 9.5 percent in 2020 Due to the impact of the covid-19 pandemic.

Gradual economic reopening allowed growth to rebound to 5.7 percent in 2021.

Statistics Philippines will release official growth data for the fourth quarter and the full year on Thursday, January 26th.


Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines (UnionBank), said growth in the October-December period could slow to 7.2% or even as high as 5.7%. The latter was factored in for its full-year forecast of 7.2 percent.

Meanwhile, Domini Velasquez, chief economist at China Banking Corp., forecast 6.9 growth for the fourth quarter as industries remained resilient despite higher input costs.

“The momentum generated by economic reopening, pent-up demand after two years of lockdown, and electoral spending contributed to 2022 growth,” she said.

Velasquez added that growth is likely to reach 7.5 percent for the full year with a better-than-expected performance for the third quarter after it raised its full-year performance.

Robert Dan Roces, economist and vice president of Security Bank, had the same full-year forecast of 7.5 percent but a slightly lower fourth-quarter forecast of 6.8 percent.

He cited rising employment, industrial optimism and increased spending as having supported the economy over the past three months.

Meanwhile, Nicholas Antonio Mapa, chief economist at ING Bank Manila, said he expects another quarter of strong growth for the Philippines, mostly buoyed by “revenge spending” during the holiday season.

He predicted an expansion of 7.5 percent in the fourth quarter and full-year growth of 7.7 percent, which falls short of the official target.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., had the most optimistic forecast: 8.0% for October-December 2022 and 7.8% above the target target for the full year.

For Ricafort, the decision to reopen the economy has increased revenues, livelihoods, employment and other business/economic activities.

UnionBank’s Asuncion warned that growth would likely slow this year, saying “the narrative about stagnation risks abroad remains and is likely to intensify as central banks hold tight final policy rates until the pace of inflation picks up…”

Security Bank’s Roces also expects a slowdown in 2022, noting that the impact of last year’s rate hikes has yet to be fully felt. He added that fears of a global slowdown and thus consumer dwindling would make it difficult to sustain last year’s growth.

“But given the sound economic fundamentals due to sustained economic reopening, there are no stagflationary scenarios and no recessionary scenarios projected in 2023 for the Philippines,” Roces said.

The government is targeting GDP growth of 6.0 to 7.0 percent this year.

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