{
  "title": "IMF Executive Board Concludes 2019 Article IV Consultation with the Philippines",
  "publication": "IMF News, February 7, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation",
  "canonical": "https://www.imf.org/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation",
  "overlayPath": "/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/index.md",
  "summary": "The Executive Board concluded the 2019 Article IV consultation on January 27, 2020, and endorsed the staff appraisal on a lapse-of-time basis.",
  "publishDate": "2020-02-07",
  "sections": [
    {
      "heading": "Executive Board assessment and overall findings",
      "content": "- The Executive Board concluded the 2019 Article IV consultation on January 27, 2020, and endorsed the staff appraisal on a lapse-of-time basis.\n- The Philippine economy \"continues to be a strong performer despite recent headwinds\" but faces downside risks to the outlook from \"global trade tensions, shifts in global financial conditions, and natural disasters.\"\n- Macroeconomic policies are described as \"attuned to the outlook\": a moderate fiscal stimulus planned for 2020 and monetary policy easing since mid-2019 are viewed as consistent with the economy moving back to capacity and achieving inflation objectives.\n- The Board noted that the Philippines \"has policy space and could adopt a more expansionary macroeconomic policy stance should downside risks materialize.\"\n  - Under adverse scenarios, fiscal stimulus should be prioritized toward public capital and social spending programs.\n  - The Bangko Sentral ng Pilipinas (BSP) has substantial space to lower its policy rate if downside surprises materialize."
    },
    {
      "heading": "Macroeconomic performance and outlook (growth, inflation, credit)",
      "content": "- Recent performance:\n  - Economic growth regained momentum in the second half of 2019 after a brief slowdown in the first half of the year.\n  - Inflation declined through much of 2019 before rebounding to 2.5 percent in December 2019.\n  - Bank lending growth slowed in the first half of 2019 but stabilized at around 10.5 percent in September 2019.\n- Projections:\n  - Real GDP growth is projected to have reached 5.7 percent in 2019 and to rise to 6.3 percent in 2020.\n  - Inflation is projected at 3.0 percent by end‑2020.\n  - The current account deficit is projected to widen slightly to 2.3 percent of GDP in 2020 as investment picks up.\n- Risks:\n  - Risks to the outlook are tilted to the downside, particularly from augmented trade tensions, shifts in global financial conditions, and natural disasters."
    },
    {
      "heading": "External sector and reserves",
      "content": "- The current account deficit is expected to have declined to 1.6 percent of GDP in 2019, down from 2.6 percent in 2018, mainly reflecting weaker imports of goods.\n- Gross international reserves reached US$87.9 billion as of end‑2019, or about 200 percent of the IMF’s reserve adequacy metric, against the backdrop of sustained portfolio inflows since late 2018.\n- Based on staff’s preliminary estimates, the 2019 external position is assessed as being in line with medium-term fundamentals and desirable policy settings.\n- The Board highlighted monitoring needs:\n  - The recent rise in portfolio and other volatile capital inflows amid declining household saving should be monitored closely.\n  - The exchange rate should remain a primary shock absorber against external shocks.\n  - Publishing FX intervention data could be considered, with appropriate lags and aggregation to guard against market sensitivities."
    },
    {
      "heading": "Fiscal and public investment recommendations",
      "content": "- Closing the infrastructure gap requires further reform efforts and stronger public investment management.\n  - Promote greater competition and allow easier public access to information in the procurement process to enable planned increases in infrastructure investment and improve timeliness and cost-effectiveness, and reduce incidence of corruption.\n- The government revised the list of priority flagship infrastructure projects with the objective of raising infrastructure investment to over 6 percent of GDP by 2022.\n- The planned tax incentive reform would make the regime more accountable and effective in encouraging investment and job creation.\n- Fiscal stance:\n  - National government overall balance (percent of GDP): -0.9 (2015), -2.4 (2016), -2.2 (2017), -3.3 (2018), -2.7 (2019), -3.2 (2020)."
    },
    {
      "heading": "Financial sector and macroprudential policy",
      "content": "- Macroprudential recommendations:\n  - Be proactive if risks of and from high credit growth increase again.\n  - BSP should timely activate the Countercyclical capital buffer (CCyB) if risks of broad-based rapid credit growth reemerge.\n  - Develop targeted macroprudential measures, such as loan-to-value and debt-to-income caps, and tighten them if high credit growth risks are sector-specific (for example, in the real estate sector).\n- Credit and monetary indicators:\n  - Claims on private sector (percent of GDP): 41.8 (2015), 44.8 (2016), 47.8 (2017), 49.9 (2018), 50.7 (2019), 52.6 (2020).\n  - Claims on private sector (percent change): 12.4 (2015), 15.1 (2016), 8.6 (2017), 13.2 (2018).\n  - 3-month PHIREF rate (percent, end of period): 2.7 (2015), 3.1 (2016)."
    },
    {
      "heading": "Structural reforms and broader policy priorities",
      "content": "- Recent laws and reforms cited as reinforcing structural momentum:\n  - Rice tariffication, a national digital ID, ease of doing business reforms, and BSP charter amendments.\n- Further recommended reform actions to reinforce the agenda:\n  - Strengthen the capacity of the public administration.\n  - Advance ease of doing business reforms.\n  - Continue the infrastructure push.\n  - Further lift restrictions on foreign direct investment.\n  - Broaden the scope of poverty reduction efforts.\n  - Mobilize more resources for climate change adaptation and mitigation.\n  - Robust implementation of the AML/CFT regime.\n  - Ease the stringent bank secrecy law."
    },
    {
      "heading": "Key statistics from \"Philippines: Selected Economic Indicators, 2015–2020\"",
      "content": "- Real GDP (annual percent change): 6.1 (2015), 6.9 (2016), 6.7 (2017), 6.2 (2018), 5.7 (2019), 6.3 (2020 Proj.).\n- Consumption (annual percent change): 6.5 (2015), 7.4 (2016), 5.9 (2017), 6.6 (2018).\n  - Private consumption (annual percent change): 7.1 (2015), 5.6 (2016).\n  - Public consumption (annual percent change): 7.6 (2015), 9.0 (2016), 13.0 (2017), 10.0 (2018), 9.3 (2019).\n- Gross fixed capital formation (annual percent change): 16.9 (2015), 26.1 (2016), 9.4 (2017), 12.9 (2018), 5.3 (2019), 15.6 (2020).\n- Domestic demand (annual percent change): 8.7 (2015), 11.7 (2016), 6.8 (2017), 8.2 (2018), 9.1 (2019).\n- Net exports (contribution to growth): -3.1 (2015), -4.9 (2016), -0.7 (2017), -2.8 (2018), -1.1 (2019), -3.8 (2020).\n- Real GDP per capita (annual percent change): 4.3 (2015), 5.1 (2016), 5.0 (2017), 4.6 (2018), 4.0 (2019).\n- Output gap (percent, +=above potential): -0.3 (2015), 0.1 (2016), 0.4 (2017), 0.2 (2018), -0.2 (2019), -0.1 (2020).\n- Unemployment rate (percent of labor force): 5.5 (2015), 5.2 (2016).\n- Underemployment rate (percent of employed persons): 18.6 (2015), 18.3 (2016), 16.1 (2017), 16.4 (2018), 14.0 (2019).\n- Employment (percent change): 2.8 (2015), 4.7 (2016), -1.6 (2017), 2.0 (2018), 2.4 (2019), 2.5 (2020).\n- Non-agriculture daily wages (Q4/Q4, National Capital Region): 3.2 (2015), 2.1 (2016), 4.9 (2017), 0.0 (2018).\n- Consumer prices (period average, 2012 basket): 0.7 (2015), 1.3 (2016), 2.9 (2017), 2.6 (2018).\n- Consumer prices (end of period, 2012 basket): 2.2 (2015), 3.0 (2016).\n- Core consumer prices (period average, 2012 basket): 1.1 (2015), 1.5 (2016), 4.1 (2017).\n- Residential real estate (Q4/Q4, latest observation as of 2019:Q3): 3.3 (2015), 0.6 (2016), 10.4 (2017).\n- Public finances (in percent of GDP):\n  - Revenue and grants: 15.8 (2015), 15.2 (2016), 16.3 (2017), 16.5 (2018), 16.7 (2019).\n  - Total expenditure and net lending: 17.6 (2015), 17.9 (2016), 19.6 (2017), 19.2 (2018), 19.9 (2019).\n  - General government gross debt: 41.5 (2015), 39.0 (2016), 39.9 (2017), 38.9 (2018).\n- Balance of payments (in percent of GDP):\n  - Current account balance: -0.4 (2015), -2.6 (2018), -2.3 (2019).\n  - FDI, net: -1.9 (2015), -1.8 (2016), -1.4 (2017).\n- Gross reserves (US$ billions): 80.7 (2015), 81.6 (2016), 79.2 (2017), 85.6 (2018), 85.0 (2019).\n- Gross reserves (percent of short-term debt, residual maturity): 409.5 (2015), 418.2 (2016), 419.3 (2017), 369.7 (2018), 402.2 (2019), 385.0 (2020).\n- Total external debt: 26.5 (2015), 24.5 (2016), 23.3 (2017), 23.9 (2018), 23.6 (2019), 22.4 (2020).\n- Memorandum items:\n  - Nominal GDP (US$ billions): 292.8 (2015), 304.9 (2016), 313.6 (2017), 330.9 (2018), 365.0 (2019), 399.7 (2020).\n  - Nominal GDP per capita (US$): 2,883 (2015), 2,953 (2016), 2,989 (2017), 3,104 (2018), 3,370 (2019), 3,632 (2020).\n  - GDP (in billions of pesos): 13,322 (2015), 14,480 (2016), 15,808 (2017), 17,426 (2018), 18,614 (2019), 20,302 (2020).\n  - Real effective exchange rate (2005=100): 111.4 (2015), 108.2 (2016), 103.4 (2017), 100.5 (2018).\n  - Peso per U.S. dollar (period average): 45.5 (2015), 47.5 (2016), 50.4 (2017), 52.7 (2018), 51.8 (2019).\n\nPress Release No. 20/35 — IMF Communications Department, February 6, 2020.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Philippines and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/index.md)",
    "[Structured JSON version](/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/index.json)",
    "[Bundle manifest](/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/bundle-manifest.json)",
    "Published: February 7, 2020",
    "The Executive Board concluded the 2019 Article IV consultation on January 27, 2020, and endorsed the staff appraisal on a lapse-of-time basis.",
    "The Philippine economy \"continues to be a strong performer despite recent headwinds\" but faces downside risks to the outlook from \"global trade tensions, shifts in global financial conditions, and natural disasters.\"",
    "Macroeconomic policies are described as \"attuned to the outlook\": a moderate fiscal stimulus planned for 2020 and monetary policy easing since mid-2019 are viewed as consistent with the economy moving back to capacity and achieving inflation objectives.",
    "The Board noted that the Philippines \"has policy space and could adopt a more expansionary macroeconomic policy stance should downside risks materialize.\"",
    "Recent performance:",
    "Projections:",
    "Risks:",
    "The current account deficit is expected to have declined to 1.6 percent of GDP in 2019, down from 2.6 percent in 2018, mainly reflecting weaker imports of goods.",
    "Gross international reserves reached US$87.9 billion as of end‑2019, or about 200 percent of the IMF’s reserve adequacy metric, against the backdrop of sustained portfolio inflows since late 2018.",
    "Based on staff’s preliminary estimates, the 2019 external position is assessed as being in line with medium-term fundamentals and desirable policy settings.",
    "The Board highlighted monitoring needs:",
    "Closing the infrastructure gap requires further reform efforts and stronger public investment management.",
    "The government revised the list of priority flagship infrastructure projects with the objective of raising infrastructure investment to over 6 percent of GDP by 2022.",
    "The planned tax incentive reform would make the regime more accountable and effective in encouraging investment and job creation.",
    "Fiscal stance:",
    "Macroprudential recommendations:",
    "Credit and monetary indicators:",
    "Recent laws and reforms cited as reinforcing structural momentum:",
    "Further recommended reform actions to reinforce the agenda:",
    "Real GDP (annual percent change): 6.1 (2015), 6.9 (2016), 6.7 (2017), 6.2 (2018), 5.7 (2019), 6.3 (2020 Proj.).",
    "Consumption (annual percent change): 6.5 (2015), 7.4 (2016), 5.9 (2017), 6.6 (2018).",
    "Gross fixed capital formation (annual percent change): 16.9 (2015), 26.1 (2016), 9.4 (2017), 12.9 (2018), 5.3 (2019), 15.6 (2020).",
    "Domestic demand (annual percent change): 8.7 (2015), 11.7 (2016), 6.8 (2017), 8.2 (2018), 9.1 (2019).",
    "Net exports (contribution to growth): -3.1 (2015), -4.9 (2016), -0.7 (2017), -2.8 (2018), -1.1 (2019), -3.8 (2020).",
    "Real GDP per capita (annual percent change): 4.3 (2015), 5.1 (2016), 5.0 (2017), 4.6 (2018), 4.0 (2019).",
    "Output gap (percent, +=above potential): -0.3 (2015), 0.1 (2016), 0.4 (2017), 0.2 (2018), -0.2 (2019), -0.1 (2020).",
    "Unemployment rate (percent of labor force): 5.5 (2015), 5.2 (2016).",
    "Underemployment rate (percent of employed persons): 18.6 (2015), 18.3 (2016), 16.1 (2017), 16.4 (2018), 14.0 (2019).",
    "Employment (percent change): 2.8 (2015), 4.7 (2016), -1.6 (2017), 2.0 (2018), 2.4 (2019), 2.5 (2020).",
    "Non-agriculture daily wages (Q4/Q4, National Capital Region): 3.2 (2015), 2.1 (2016), 4.9 (2017), 0.0 (2018).",
    "Consumer prices (period average, 2012 basket): 0.7 (2015), 1.3 (2016), 2.9 (2017), 2.6 (2018).",
    "Consumer prices (end of period, 2012 basket): 2.2 (2015), 3.0 (2016).",
    "Core consumer prices (period average, 2012 basket): 1.1 (2015), 1.5 (2016), 4.1 (2017).",
    "Residential real estate (Q4/Q4, latest observation as of 2019:Q3): 3.3 (2015), 0.6 (2016), 10.4 (2017).",
    "Public finances (in percent of GDP):",
    "Balance of payments (in percent of GDP):",
    "Gross reserves (US$ billions): 80.7 (2015), 81.6 (2016), 79.2 (2017), 85.6 (2018), 85.0 (2019).",
    "Gross reserves (percent of short-term debt, residual maturity): 409.5 (2015), 418.2 (2016), 419.3 (2017), 369.7 (2018), 402.2 (2019), 385.0 (2020).",
    "Total external debt: 26.5 (2015), 24.5 (2016), 23.3 (2017), 23.9 (2018), 23.6 (2019), 22.4 (2020).",
    "Memorandum items:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Philippines and the IMF](http://www.imf.org/external/country/PHL/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/index.md",
    "json": "/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/index.json",
    "bundleManifest": "/en/news/articles/2020/02/06/pr2035-phillipines-imf-executive-board-concludes-2019-article-iv-consultation/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-25T23:25:44.562Z"
}