The Philippine economy is expected to perform better in the second half of 2024 with a decelerating inflation and an anticipated reduction in the central bank interest rates, said Moody’s Analytics in its weekly economic view on the Asia Pacific.
It said the local economy “will fare better this year, especially in the second half.”
“Fading inflation will give the Bangko Sentral ng Pilipinas confidence to lower borrowing costs,” said Moody’s Analytics.
It also noted that the “volatile inflation prints in the first half of the year will persuade BSP to stay on hold, leaving us to expect its first rate cut to be in June at the earliest. Until then, household budgets will be under pressure.”
It added that “as borrowing costs ease, private consumption and investment should benefit (while an) improving external climate will bolster trade, and an expected upturn in demand for semiconductors and electronics will brighten prospects in the second half.”
The Philippine gross domestic product (GDP) grew by 5.6 percent in the fourth quarter 2023, lower compared to the revised six percent in the third quarter.
Overall GDP growth in 2023 stood at 5.6 percent, below the government target of six percent to seven percent. It is also lower than the 7.6 percent growth in 2022.