By Anna Leah Gonzales
MANILA – The Philippine economy is expected to recover next year, driven by a gradual rebound in investments, according to the International Monetary Fund (IMF).
In its World Economic Outlook (WEO), the IMF projects that Philippine economic growth will accelerate to 5.1 percent next year, up from 3.4 percent this year.
“This is a robust recovery —thanks to the still elevated Philippines growth potential— which allow Philippines to maintaining a relatively strong pace compared with many ASEAN peers next year,” an IMF spokesperson said in a separate email.
The spokesperson said the recovery is expected to be driven by a gradual rebound in investment as confidence improves and the effects of the energy shock ease.
Compared to other countries in emerging and developing Asia, the latest projection is higher than Thailand’s 2.1 percent, China’s 4 percent, and Malaysia’s 4.6 percent economic growth forecast next year.
Headline inflation, meanwhile, is projected to remain elevated at 5.6 percent this year and 4.1 percent in 2027.
The IMF spokesperson said monetary policy must prevent temporary price shocks from turning into persistent inflation, without unnecessarily weakening economic activity.
“With inflation expectations broadly anchored and substantial spare capacity in the economy, further tightening should depend on persistent inflationary pressures or stronger second-round effects. Over the longer term, improving food and energy security will be essential to reducing the Philippines’ vulnerability to future shocks,” the spokesperson said.
Moving forward, main risks to growth include renewed delays in public infrastructure investment, persistently high energy and food prices, and weaker investor confidence.
The IMF said restoring public investment while strengthening governance will be key to making the recovery durable.
