S&P adjusts PH growth projections, sees positive trends ahead

S&P Global Ratings has made some updates to its growth forecasts for the Philippines, reflecting a generally optimistic outlook for the country's economy. In its latest report, S&P has slightly lowered its growth projections for 2024 and 2026 while increasing the forecast for 2025, signaling resilience amid a robust regional economic environment.

The updated forecast now anticipates a growth rate of 5.7% for the Philippines in 2023, a minor adjustment from the previous estimate of 5.8%. This projection, while slightly below the Philippine government's target of 6.0% to 7.0%, underscores a solid foundation for ongoing economic activity. For 2025, S&P has raised its growth forecast to 6.1%, reflecting confidence in the country’s economic potential, though this remains just shy of the government's 6.5% to 7.5% target. The projection for 2026 has been slightly adjusted to 6.4% from 6.5%, still within a strong growth trajectory.

As of mid-2023, the Philippine economy has shown impressive resilience, achieving a growth rate of 6.0% following strong performances in the first half of the year. Finance Secretary Ralph Recto remains optimistic, stating that the economy is on track to meet its growth goals for the year. “The economy is continuously growing,” he affirmed, projecting a robust 6.1% expansion.

In addition, Recto highlighted the potential benefits of easing inflation rates, predicting inflation to decrease to 2.5% this month and average 3.4% for the year. This aligns with the Bangko Sentral ng Pilipinas' target range of 2.0% to 4.0%, providing a favorable environment for sustained economic growth.

S&P anticipates that inflation will continue to moderate in the coming years, forecasting rates of 3.4% for 2023, 3.1% for 2024, and stabilizing at 3.0% in 2026 and 2027. The agency's adjustments reflect a positive outlook for the Philippine economy, which remains a vital player in the dynamic Southeast Asian landscape, benefiting from strong domestic demand and a recovering export sector.