Philippines: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Philippines

The 2023 Article IV Consultation discusses that the Philippines’ growth momentum started to moderate after a strong post-pandemic recovery. Growth is projected to rebound in the second half of 2023 and 2024 while inflation is expected to gradually approach the target. Risks to the growth outlook are tilted to the downside, mainly stemming from persistently high inflation, globally and locally, and a highly uncertain global economic and geopolitical environment. Upside risks to the inflation outlook, include higher commodity prices and potential second-round effects. Policy priorities should include anchoring inflation expectations, maintaining debt sustainability, increasing economic and financial resilience to adverse shocks, supporting the investment recovery, and implementing reforms to raise productivity growth and the standard of living for all Filipinos. Sustained efforts to reduce infrastructure and education gaps, promote foreign investment, strengthen governance, and harness the digital economy can boost growth potential and inclusivity. These reforms should be complemented by efforts to further strengthen skills and the social safety net while addressing climate risks through a multipronged approach.