## IMF Executive Board Concludes 2023 Article IV Consultation with the Philippines _IMF News, December 15, 2023_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2023 Article IV Consultation with the Philippines](https://www.imf.org/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult) ## Other formats - [Markdown version](/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult/index.md) - [Structured JSON version](/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult/index.json) - [Bundle manifest](/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult/bundle-manifest.json) ## Bibliographic details - Published: December 15, 2023 --- ### Overview - 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. ### Macro outlook and projections - 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. ### Executive Board assessment and policy guidance - 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: - Directors agreed monetary policy has been tightened appropriately to anchor inflation expectations. - Recommended maintaining a restrictive policy stance until inflation fully returns to target and remaining ready to tighten further if upside risks materialize. - 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. - Emphasized strengthening coordination between the central bank and the Bureau of the Treasury to further develop the benchmark yield curve. - Financial sector: - Banking sector is well-capitalized and liquid; potential vulnerabilities in exposure to commercial real estate and leveraged corporates warrant close monitoring. - Welcomed progress in strengthening financial supervision and regulation and the initiative to revamp the bank resolution framework. - Encouraged further strengthening of the AML/CFT framework to exit the FATF grey list. - Fiscal policy: - Directors supported the pace of fiscal consolidation envisaged under the medium-term fiscal framework. - Recommended adopting additional medium-term tax measures to create more fiscal space for policy priorities and social spending. - Welcomed authorities’ commitment to reform the military and uniformed personnel’s pension system and to improve expenditure efficiency through digitalization. - Structural policies and social priorities: - Sustained efforts to reduce infrastructure and education gaps and to harness the digital economy are needed to reap the benefits of the demographic dividend. - Stressed importance of strengthening governance and improving the ease of doing business. - Emphasized creating quality jobs and further enhancing education and social protection programs to help reduce poverty and inequality. - Encouraged efforts to build resilience to natural disasters and climate risks, including prioritizing climate resilient infrastructure. ### Key statistics (selected, as reported) - Real GDP growth: - 2020: -9.5 - 2021: 5.7 - 2022: 7.6 - 2023 (Est.): 5.3 - 2024 (Proj.): 6.0 - 2025 (Proj.): 6.1 - Consumption (annual percentage change): - 2022: 7.7 - 2023 (Est.): 4.0 - 2024 (Proj.): 6.5 - Gross fixed capital formation (annual percentage change): - 2020: -27.3 - 2021: 9.8 - 2022: 9.7 - 2023 (Est.): 11.2 - 2024 (Proj.): 10.8 - Unemployment rate (percent of labor force): - 2020: 10.4 - 2021: 7.8 - 2022: 5.4 - 2023 (Est.): 5.1 - 2024 (Proj.): 5.6 - Consumer prices (period average): - 2020: 3.9 - 2021: 5.8 - 2022: 3.7 - Consumer prices (end of period): - 2020: 3.3 - 2021: 3.1 - 2022: 4.5 - 2023 (Est.): 3.2 - Core consumer prices (period average): - 2020: 3.4 - 2021: (table entry omitted) - Claims on private sector (in percent of GDP): - 2020: 52.0 - 2021: 49.9 - 2022: 48.9 - 2023 (Est.): 47.7 - 2024 (Proj.): 48.3 - 2025 (Proj.): 48.6 - National government overall balance (in percent of GDP): - 2020: -7.4 - 2021: -8.3 - 2022: -7.2 - 2023 (Est.): -5.7 - 2024 (Proj.): -5.0 - 2025 (Proj.): -4.6 - Revenue and grants (percent of GDP): - 2020: 15.5 - 2021: 16.1 - 2022: 15.7 - 2023 (Est.): 16.4 - 2024 (Proj.): 16.7 - Total expenditure (percent of GDP): - 2020: 23.4 - 2021: 23.8 - 2022: 23.3 - 2023 (Est.): 21.4 - 2024 (Proj.): 21.3 - National government gross debt (percent of GDP): - 2020: 54.6 - 2021: 60.4 - 2022: 60.9 - 2023 (Est.): 61.1 - Current account balance (percent of GDP): - 2020: -4.5 - 2021: -3.0 - 2022: -2.6 - FDI, net (percent of GDP): - 2020: -0.9 - 2021: -2.5 - 2022: -1.3 - 2023 (Est.): -1.0 - 2024 (Proj.): -1.1 - Total external debt (percent of GDP): - 2020: 27.2 - 2021: 27.0 - 2022: 27.5 - 2023 (Est.): 27.1 - 2024 (Proj.): 26.5 - Gross reserves (US$ billions): - 2020: 110.1 - 2021: 108.8 - 2022: 96.1 - 2023 (Est.): 98.1 - 2024 (Proj.): 93.4 - 2025 (Proj.): 89.4 - Gross reserves (percent of short-term debt, remaining maturity): - 2020: 478.4 - 2021: 512.3 - 2022: 381.3 - 2023 (Est.): 351.0 - 2024 (Proj.): 372.3 - 2025 (Proj.): 332.0 - Memorandum items: - 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 - 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 - 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 - Real effective exchange rate (2010=100): 2020: 111.3; 2021: 111.1; 2022: 109.3 - Peso per U.S. dollar (period average): 2020: 49.6; 2021: 49.3; 2022: 54.5 *IMF press release, December 15, 2023* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2023/12/14/pr23449-philippines-imf-exec-board-concludes-2023-art-iv-consult_