The Philippines Is Set to Become the Fastest-Growing Economy in ASEAN, IMF Says

The Philippine economy is seen to be picking up pace in the next two years. 

Figures from the latest World Economic Outlook report by the International Monetary Fund (IMF) showed the Philippines’ gross domestic product (GDP) could hit up to more than six percent. Should this come to fruition, the country would become the fastest-growing economy among members of the Association of Southeast Asian Nations (ASEAN), and the second fastest across Asia.

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“The Philippine economy continues to perform well, despite external challenges and policy tightening,” the IMF said in a statement. “GDP growth moderated in 2023 to 5.5 percent due to the confluence of global shocks, inflationary pressures, and slowing consumption.”

The country’s economic growth is seen to reach six percent this 2024, while rebound is pegged at 6.2 percent next year. Both numbers are only second to India’s seven and 6.5 percent, respectively. According to the IMF, this is on the back of stronger demand for consumption, increase in both public and private investments, and recovery in exports. 

“Efforts to attract foreign direct investment, promote business-friendly reforms, and enhance competitiveness could raise the economy’s long-term growth potential,” said the IMF.

Potential hurdles to hitting the new targets, on the other hand, include geoeconomic fragmentation, high interest rates, as well as climate-related shocks.

The IMF originally projected that the Philippines' GDP will reach 6.2 percent this year. In June, it lowered the figure to six percent, following a slower than expected growth in the first quarter.

As for the whole ASEAN, the forecast stands at 4.5 percent this 2024, and 4.6 percent the following year, based on the report. The region consists of the Philippines, Thailand, Vietnam, Malaysia, and Indonesia.

“Asia’s emerging [markets] remain the main engine for the global economy, yet prospects for the next five years remain weak largely because of waning momentum,” the IMF said.