Country Economic Forecasts > Philippines

Following the very strong 7.1% GDP growth posted in Q3, the latest consumer survey suggests that the economic outlook remains quite upbeat, with consumer confidence about the current situation rising yet further in Q4. Given robust consumer spending, we expect that GDP will grow by 6.9% in 2016 as a whole. In contrast, business confidence lost some momentum in Q4. Weak global demand, uncertainty about the government's foreign policy and economic reforms, a falling peso, stiff competition, and potential supply constraints all weighed heavily on sentiment. However, the PMI for November stood at 56.3; although this was slightly lower than in October it still suggests another solid month of expansion in the manufacturing sector.Overall, the country's macroeconomic fundamentals remain strong, with inflation set to stay in the target range in 2017 and 2018, and with substantial increases in government spending on infrastructure investment supporting economic development. We forecast GDP to grow by around 6% pa in both 2017 and 2018.