MANILA, Philippines — Multilateral lender International Monetary Fund (IMF) has raised its 2022 gross domestic product (GDP) growth forecast for the Philippines to 6.7 percent from the original target of 6.5 percent despite the expected slowdown in the second half.
IMF resident representative Ragnar Gudmundsson said in an e-mail that the latest GDP growth projection based on the July 2022 World Economic Outlook Update reflected the strong recovery momentum in the first half.
Gudmundsson said the Philippines’ real GDP returned to its pre-pandemic level in the first half.
“However, the growth momentum is expected to moderate in the second half of 2022 and in 2023,” Gudmundsson said.
The country’s GDP booked a stronger-than-expected 8.3 percent expansion in the first quarter despite the reimposition of strict COVID-19 quarantine and lockdown protocols.
The National Capital Region (NCR) and nearby areas returned to Alert Level 3 in January as COVID-19 cases hit daily record numbers due to the emergence of the more contagious Omicron variant.
The level has since been lowered to Alert Level 1 since March with the continued reopening of the economy after the more aggressive rollout of COVID vaccines and booster shots.
The latest GDP projection of the IMF is well within the revised 6.5 to 7.5 percent growth target set by the Cabinet-level Development Budget Coordination Committee (DBCC).
The target was lowered from seven to eight percent and from the original seven to nine percent due to the impact of the Russia-Ukraine war as well as soaring inflation.
For next year, the DBCC projects the GDP to grow between 6.5 and eight percent starting next year until 2028.
However, the IMF lowered its GDP growth forecast to about five percent from 6.3 percent due to external developments.
“Our growth projection for 2023 now stands at about five percent, due to base effects, the impact of the war in Ukraine, slowdown in major trading partners, faster US monetary policy tightening, and high inflation,” Gudmundsson said.
The IMF retained the GDP growth target for ASEAN-5 at 5.3 percent for this year but lowered next year’s target at 5.1 percent instead of 5.9 percent.
It also slashed the world GDP growth projection to 3.2 instead of 3.6 percent for this year and to 2.9 instead of 3.6 percent for 2023.
“A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022,” the IMF said in its latest forecast.