The Philippines remains one of the most promising areas of opportunity in the Asean region. Amid the complex and challenging global economic landscape in 2023, the Philippines exhibited remarkable resilience, ending the year stronger with an annual growth rate of 5.6%, an outturn that exceeded forecasts by multilateral organizations and private analysts. Key indicators showed robust domestic demand, a substantial recovery in the labour market, and a stable external position backed by strong international currency reserves and manageable external debt.
In 2024, the government projects a faster GDP growth of 6.5% to 7.5% despite domestic and external headwinds. Over the next decade, the Philippine economy is forecast to continue growing rapidly, with total GDP increasing from US$440 billion in 2023 to US$800 billion in 2030. Credit rating agencies and market analysts remain confident in the country’s macroeconomic fundamentals. However, inflation is a main worry as food and energy prices continue to rise.
Infrastructure plays a pivotal role in the country’s economic development. To sustain the momentum of the government infrastructure projects, a big chunk of this year’s budget has been allocated to the Build Better More programme. The Maharlika Investment Fund, the country’s first sovereign wealth fund, is expected to be a catalyst in financing priority projects.
The revival of the public-private partnership (PPP) scheme is expected to attract more private-sector participation in high-quality infrastructure and services in the country. Meanwhile, Ralph Recto, a seasoned politician and former economic planning chief, has stepped in as the new finance secretary. His actions are being closely watched, as he and the rest of the economic team steer policy to bolster growth amid a raft of uncertainties.
The Philippines has successfully returned to the international capital markets, suggesting that investor confidence remains solid. Last year’s pivotal sukuk issuance opens a new pathway to secure additional financing, unlocking for the country the largely untapped Islamic finance market.
Domestically, the remarkable reception to the retail treasury bond (RTB 29) is a testament to the solid partnership the government has forged with retail investors. To further deepen the capital market, the Securities and Exchange Commission aims to list 300 companies by 2025. The maiden issuance of tokenized treasury bonds (TTBs) has opened a novel channel for domestic investors to access government securities. These digital initiatives help to promote financial platforms, boost financial inclusion, and stimulate broader investor participation in the country’s capital markets.
The Philippines is highly vulnerable to the impacts of climate change, and has been experiencing frequent extreme weather events. A sustainable finance ecosystem has to be established to attract investments in climate mitigation and adaptation projects, and accelerate the country’s transition towards a low-carbon economy.
The Asset is proud to be hosting the 19th Philippine Summit. The high-level discussion gathers the country’s thought leaders, economic experts, government regulators, and top banking and business executives to share their views on the pressing issues and opportunities facing the country. The theme for this year is: Seizing opportunities, sustaining growth.