{
  "title": "IMF Executive Board Concludes 2023 Article IV Consultation with the Philippines",
  "publication": "IMF News, December 15, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) concluded the 2023 Article IV consultation with the Philippines.",
  "publishDate": "2023-12-15",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board of the International Monetary Fund (IMF) concluded the 2023 Article IV consultation with the Philippines.\n- Growth momentum moderated after a strong post-pandemic recovery, reflecting external headwinds, fiscal underspending, and normalization of pent-up demand.\n- The labor market has normalized, driven by the service sector.\n- The current account deficit is narrowing, supported by lower imports of fuel and capital goods and a strong recovery in the service sector.\n- International reserves remain adequate. Domestic financial conditions have tightened due to more stringent credit standards and a weaker exchange rate."
    },
    {
      "heading": "Macro outlook and projections",
      "content": "- Growth is expected to bottom out in 2023 and bounce back in the second half of 2023.\n- Real GDP growth projection: 6.0 percent in 2024, with a medium-term growth potential of about 6–6½ percent.\n- Inflation: headline inflation decelerated to 4.9 percent in October from the peak of 8.7 percent in January; core inflation remained elevated at 5.3 percent in October.\n- Inflation is projected to gradually approach the target in early 2024, though recurrent supply shocks cloud the disinflation trajectory.\n- The current account deficit is expected to continue to narrow in 2024.\n- Risks to the growth outlook are tilted to the downside, mainly from persistently high inflation, a highly uncertain global economic and geopolitical environment; upside risks to inflation include higher commodity prices and potential second-round effects."
    },
    {
      "heading": "Executive Board assessment and policy guidance",
      "content": "- Directors commended the authorities for appropriate policy responses and implementation of key structural reforms to stimulate exports, spur foreign investment, and raise growth potential.\n- Monetary policy:\n  - Directors agreed monetary policy has been tightened appropriately to anchor inflation expectations.\n  - Recommended maintaining a restrictive policy stance until inflation fully returns to target and remaining ready to tighten further if upside risks materialize.\n  - Allowed exchange rate flexibility to absorb shocks, while permitting temporary foreign exchange interventions under limited circumstances to ensure orderly market conditions and address risks to price stability.\n  - Emphasized strengthening coordination between the central bank and the Bureau of the Treasury to further develop the benchmark yield curve.\n- Financial sector:\n  - Banking sector is well-capitalized and liquid; potential vulnerabilities in exposure to commercial real estate and leveraged corporates warrant close monitoring.\n  - Welcomed progress in strengthening financial supervision and regulation and the initiative to revamp the bank resolution framework.\n  - Encouraged further strengthening of the AML/CFT framework to exit the FATF grey list.\n- Fiscal policy:\n  - Directors supported the pace of fiscal consolidation envisaged under the medium-term fiscal framework.\n  - Recommended adopting additional medium-term tax measures to create more fiscal space for policy priorities and social spending.\n  - Welcomed authorities’ commitment to reform the military and uniformed personnel’s pension system and to improve expenditure efficiency through digitalization.\n- Structural policies and social priorities:\n  - Sustained efforts to reduce infrastructure and education gaps and to harness the digital economy are needed to reap the benefits of the demographic dividend.\n  - Stressed importance of strengthening governance and improving the ease of doing business.\n  - Emphasized creating quality jobs and further enhancing education and social protection programs to help reduce poverty and inequality.\n  - Encouraged efforts to build resilience to natural disasters and climate risks, including prioritizing climate resilient infrastructure."
    },
    {
      "heading": "Key statistics (selected, as reported)",
      "content": "- Real GDP growth:\n  - 2020: -9.5\n  - 2021: 5.7\n  - 2022: 7.6\n  - 2023 (Est.): 5.3\n  - 2024 (Proj.): 6.0\n  - 2025 (Proj.): 6.1\n- Consumption (annual percentage change):\n  - 2022: 7.7\n  - 2023 (Est.): 4.0\n  - 2024 (Proj.): 6.5\n- Gross fixed capital formation (annual percentage change):\n  - 2020: -27.3\n  - 2021: 9.8\n  - 2022: 9.7\n  - 2023 (Est.): 11.2\n  - 2024 (Proj.): 10.8\n- Unemployment rate (percent of labor force):\n  - 2020: 10.4\n  - 2021: 7.8\n  - 2022: 5.4\n  - 2023 (Est.): 5.1\n  - 2024 (Proj.): 5.6\n- Consumer prices (period average):\n  - 2020: 3.9\n  - 2021: 5.8\n  - 2022: 3.7\n- Consumer prices (end of period):\n  - 2020: 3.3\n  - 2021: 3.1\n  - 2022: 4.5\n  - 2023 (Est.): 3.2\n- Core consumer prices (period average):\n  - 2020: 3.4\n  - 2021: (table entry omitted)\n- Claims on private sector (in percent of GDP):\n  - 2020: 52.0\n  - 2021: 49.9\n  - 2022: 48.9\n  - 2023 (Est.): 47.7\n  - 2024 (Proj.): 48.3\n  - 2025 (Proj.): 48.6\n- National government overall balance (in percent of GDP):\n  - 2020: -7.4\n  - 2021: -8.3\n  - 2022: -7.2\n  - 2023 (Est.): -5.7\n  - 2024 (Proj.): -5.0\n  - 2025 (Proj.): -4.6\n- Revenue and grants (percent of GDP):\n  - 2020: 15.5\n  - 2021: 16.1\n  - 2022: 15.7\n  - 2023 (Est.): 16.4\n  - 2024 (Proj.): 16.7\n- Total expenditure (percent of GDP):\n  - 2020: 23.4\n  - 2021: 23.8\n  - 2022: 23.3\n  - 2023 (Est.): 21.4\n  - 2024 (Proj.): 21.3\n- National government gross debt (percent of GDP):\n  - 2020: 54.6\n  - 2021: 60.4\n  - 2022: 60.9\n  - 2023 (Est.): 61.1\n- Current account balance (percent of GDP):\n  - 2020: -4.5\n  - 2021: -3.0\n  - 2022: -2.6\n- FDI, net (percent of GDP):\n  - 2020: -0.9\n  - 2021: -2.5\n  - 2022: -1.3\n  - 2023 (Est.): -1.0\n  - 2024 (Proj.): -1.1\n- Total external debt (percent of GDP):\n  - 2020: 27.2\n  - 2021: 27.0\n  - 2022: 27.5\n  - 2023 (Est.): 27.1\n  - 2024 (Proj.): 26.5\n- Gross reserves (US$ billions):\n  - 2020: 110.1\n  - 2021: 108.8\n  - 2022: 96.1\n  - 2023 (Est.): 98.1\n  - 2024 (Proj.): 93.4\n  - 2025 (Proj.): 89.4\n- Gross reserves (percent of short-term debt, remaining maturity):\n  - 2020: 478.4\n  - 2021: 512.3\n  - 2022: 381.3\n  - 2023 (Est.): 351.0\n  - 2024 (Proj.): 372.3\n  - 2025 (Proj.): 332.0\n- Memorandum items:\n  - Nominal GDP (US$ billions): 2020: 361.8; 2021: 394.1; 2022: 404.3; 2023 (Est.): 434.9; 2024 (Proj.): 471.8; 2025 (Proj.): 510.3\n  - Nominal GDP per capita (US$): 2020: 3,326; 2021: 3,576; 2022: 3,624; 2023 (Est.): 3,853; 2024 (Proj.): 4,133; 2025 (Proj.): 4,423\n  - GDP (in billions of pesos): 2020: 17,952; 2021: 19,411; 2022: 22,025; 2023 (Est.): 24,312; 2024 (Proj.): 26,565; 2025 (Proj.): 28,934\n  - Real effective exchange rate (2010=100): 2020: 111.3; 2021: 111.1; 2022: 109.3\n  - Peso per U.S. dollar (period average): 2020: 49.6; 2021: 49.3; 2022: 54.5\n\nIMF press release, December 15, 2023\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- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult"
    }
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    "Published: December 15, 2023",
    "The Executive Board of the International Monetary Fund (IMF) concluded the 2023 Article IV consultation with the Philippines.",
    "Growth momentum moderated after a strong post-pandemic recovery, reflecting external headwinds, fiscal underspending, and normalization of pent-up demand.",
    "The labor market has normalized, driven by the service sector.",
    "The current account deficit is narrowing, supported by lower imports of fuel and capital goods and a strong recovery in the service sector.",
    "International reserves remain adequate. Domestic financial conditions have tightened due to more stringent credit standards and a weaker exchange rate.",
    "Growth is expected to bottom out in 2023 and bounce back in the second half of 2023.",
    "Real GDP growth projection: 6.0 percent in 2024, with a medium-term growth potential of about 6–6½ percent.",
    "Inflation: headline inflation decelerated to 4.9 percent in October from the peak of 8.7 percent in January; core inflation remained elevated at 5.3 percent in October.",
    "Inflation is projected to gradually approach the target in early 2024, though recurrent supply shocks cloud the disinflation trajectory.",
    "The current account deficit is expected to continue to narrow in 2024.",
    "Risks to the growth outlook are tilted to the downside, mainly from persistently high inflation, a highly uncertain global economic and geopolitical environment; upside risks to inflation include higher commodity prices and potential second-round effects.",
    "Directors commended the authorities for appropriate policy responses and implementation of key structural reforms to stimulate exports, spur foreign investment, and raise growth potential.",
    "Monetary policy:",
    "Financial sector:",
    "Fiscal policy:",
    "Structural policies and social priorities:",
    "Real GDP growth:",
    "Consumption (annual percentage change):",
    "Gross fixed capital formation (annual percentage change):",
    "Unemployment rate (percent of labor force):",
    "Consumer prices (period average):",
    "Consumer prices (end of period):",
    "Core consumer prices (period average):",
    "Claims on private sector (in percent of GDP):",
    "National government overall balance (in percent of GDP):",
    "Revenue and grants (percent of GDP):",
    "Total expenditure (percent of GDP):",
    "National government gross debt (percent of GDP):",
    "Current account balance (percent of GDP):",
    "FDI, net (percent of GDP):",
    "Total external debt (percent of GDP):",
    "Gross reserves (US$ billions):",
    "Gross reserves (percent of short-term debt, remaining maturity):",
    "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/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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