The Philippines failed to meet its sizeable economic growth target in 2023 as household spending power was held down by factors such as rising inflation and rising interest rates.。

On January 31, the official data for 2023 showed that the annual GDP growth rate of the Philippines was 5.6%, much lower than 7 in 2022.The 6% growth rate also fell short of the government's original target of 6-7%.。In the last quarter of 2023, the GDP of the Philippines reached 5.6%, compared to 7% in the same period in 2022.1% month-on-month decline of 1.5%。

In 2023, the Philippine economy faces many obstacles, from soaring food prices to persistent bottlenecks in the supply chain.。In a timely response to the situation, the government immediately set a price cap on rice, while the central bank raised interest rates to their highest level in years to curb this inflation.。

In October 2023, the Bank of the Philippines (BSP) raised the emergency by 25 basis points (0.25%), the benchmark lending rate is currently maintained at 6..5%。And Nicholas Antonio Mapa, senior economist at ING Bank Manila, argues that the economy might have grown faster without such an aggressive increase in interest rates.。

On the day the data were released, the Philippine government pledged to redouble its efforts to curb inflation, which has hampered economic growth.。Arsenio Balisacan, head of the country's National Economic and Development Authority (NEDA), said: "The government will always insist on controlling inflation, especially in basic commodities such as food.。"

According to statistics, in the last three months of 2023, public spending in the Philippines shrank by 1.8%, compared with an increase of 6 in the previous quarter..7%。Balisacan noted that the decline was the result of the government's fiscal consolidation plan, and that the 2022 vaccination program and the presidential election also cost a lot of resources.。

Despite this, professionals stress that the domestic economy, such as agriculture, warehousing, logistics, transportation and other sectors still need "a lot of investment," especially in the agricultural sector, which accounts for about 10% of GDP.。Because in the long run, more effective public spending on agriculture can increase productivity and improve local food supplies, thereby reducing food price shocks。In 2023, the Philippine agricultural sector grew by 1.2%, higher than the previous year 0.5% increase。

Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said the Philippines' growth slowdown in 2023 was "natural" as the benefits of a return to opening up after the epidemic were fading.。He said: "The problem is that the reopening is partly due to a surge in consumer borrowing, and in the face of an aggressive rate hike cycle by the Philippine central bank, some regions have begun to struggle, with consumers drawing on their savings to cope with rising prices.。"

As inflation slows to 3 in December 2023.9%, Philippines' Household Consumption Grows 5 in Last Quarter.3%, but the annual average inflation rate is still as high as 6%。

It is estimated that domestic economic growth will accelerate in 2024 due to slower inflation and the possibility of a rate cut in the second half of the year.。

However, economic growth in the Philippines is still struggling amid headwinds such as a global economic slowdown and rising geopolitical tensions, while El Niño and other climate disruptions from natural conditions could also pose challenges to food supply.。