Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Philippines' economy is considered as one of the most dynamic economies in East Asia and the Pacific. In 2022, GDP grew by an estimated 6.5%, mainly due to an increase in private domestic consumption and fixed investment. However, although the Filipino economy has been recovering since the outbreak of the COVID-19 pandemic, recovery has yet to reach full momentum due to persistent downside pressures. According to the IMF, GDP growth is expected to slightly decrease to 5% in 2023 before picking up to 6% in 2024. Key economic drivers include solid fundamentals, a competitive workforce, a stable job market, steady remittances, and investment in the construction sector (World Bank).

The Philippines' public deficit reached 5.4% of GDP in 2022 and it is expected to decrease to 4.7% in 2023 and 3.7% in 2024. Public debt increased to 59.3% of GDP in 2022 and is expected to further increase in 2023 and 2024, to 61% and 61.2%, respectively. Inflation rate also increased in 2022, reaching 5.3% and surpassing the Central Bank’s limit of 4%, mainly due to higher commodity prices and global supply factors. However, according to the IMF, inflation is expected to decrease to 4.3% in 2023 and 3.1% in 2024. Domestic consumption is expected to remain the main driver of the economy, accounting for 70% of GDP. Institutional reforms are needed in business freedom, investment freedom, and rule of law, according to the Heritage Foundation. The COVID-19 crisis has revealed long-existing cracks in the country’ systems and institutions, and the government estimates that the Filipino economy could take a decade to return to pre-pandemic growth. Nevertheless, the Philippines have been gradually recovering following the initial impact of the pandemic, mainly boosted by the government’s policy reforms and expansionary fiscal program.

In 2022, the unemployment rate decreased to 5.7% - a trend that's expected to continue in 2023 (5.4%) and 2024 (5.1%). Inequality in wealth distribution and poverty rates are estimated to have worsened after the pandemic, pushing around 2.7 million more Filipinos into poverty, to a total of 23.7% of the population living in poverty. Nevertheless, one of the government's main goals is to reduce the poverty rate and increase equality among Filipino society.

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