BUSINESS GROUPS said they expect tourism and agriculture to drive the economic recovery in 2023, with remittances providing a cushion against any possible external shocks.
George T. Barcelon, Philippine Chamber of Commerce and Industry president, said his organization is “cautiously optimistic” of the country’s economic performance this year.
“Our economy will sustain a healthy pace in the first half of the new year. There may still be interest hike(s) mirroring the US and EU actions to mitigate inflation (but) remittances and the rebounding domestic economy will allow the Philippines to weather it,” Mr. Barcelon told reporters in a Viber message.
The Bangko Sentral ng Pilipinas increased interest rates by 350 basis points in 2022, bringing its benchmark rate to 5.5% in response to high inflation and the weakening peso.
Mr. Barcelon said that the government should address high food prices, which have added to the pressure to raise wages, raising the prospect of more inflation going forward.
“This is a vicious cycle that could stunt business and negatively impact the competitiveness of the export sector. As such, the outlook on both job creation and sustainability for the year may encounter headwinds,” Mr. Barcelon said.
Mr. Barcelon said tourism and agriculture could be the economy’s sources of strength, as will infrastructure.
“The government’s plans to continue infrastructure spending and massive housing projects for the homeless will certainly give impetus to our economy. From worldwide trends, travel and leisure business are coming back on strong. The recent trip of President Ferdinand R. Marcos, Jr. has (secured) China’s support for our tourism and agricultural sectors,” Mr. Barcelon said.
Lily Lim, vice chair for media and public information affairs for the Federation of Filipino Chinese Chambers of Commerce & Industry, Inc., said in a separate televised briefing on Monday that the group is projecting 6.5% to 7.5% gross domestic product (GDP) growth for 2023.
According to Ms. Lim, the forecast will come on the back of agriculture.
“We will hit 6.5% to 7.5% (GDP growth) for sure within the year with exports of our agricultural products to China. We have fruits such as durian, avocado, bananas, mangosteen, and others,” Ms. Lim said.
“Following the trip of Mr. Marcos to China, we expect improvement in the agricultural sector. We should also expect improvements in development cooperation, infrastructure, maritime security, and tourism,” she added.
GDP grew 7.6% in the third quarter. Fourth-quarter GDP is set to be released on Jan. 26.
The government projects GDP to have increased between 6.5% and 7.5% last year. For 2023, the government has set a target range of 6% to 7%.
Ms. Lim called for a further easing of coronavirus disease 2019 (COVID-19) related restrictions in order to boost economic growth.
“There are so many countries and also for us, the case count has dropped. (We should ease) restrictions… and also prepare ourselves to grow agriculture, tourism… (and) infrastructure — everything needed to support (the economy),” Ms. Lim said.
Mr. Marcos has said the Philippines will monitor the COVID-19 situation in China, which reopened its borders to international travelers on Jan. 8. — Revin Mikhael D. Ochave