IMF Staff Country Reports

The 2024 Article IV Consultation highlights that growth is expected to accelerate in 2024-25, supported by disinflation, and gradually declining borrowing costs as monetary policy normalizes in Philippines. Growth is expected to pick up modestly in 2024-25 while inflation should remain within the Bangko Sentral ng Pilipinas’ target range. Systemic risks within the financial system are moderate, but pockets of vulnerabilities remain. The banking system has sufficient liquidity and capital buffers, and nonperforming loans are low. The more gradual pace of consolidation in the revised fiscal program is appropriate and should be supported by a concrete and sustainable plan to raise tax revenues and implement expenditure reforms. The Philippine economy holds significant potential with its abundant natural resources, untapped blue economy, and a sizable demographic dividend. Unlocking the medium-term growth potential will crucially depend on comprehensive and well-sequenced structural reforms. These reforms, coupled with strengthened social protection programs, should aim to boost job creation, enhance productivity, increase resilience to climate change, and reduce poverty and inequality.