IMF praises Philippine economic resilience despite challenges

The International Monetary Fund (IMF) praised on Monday the Philippine economy’s resilience despite global challenges and tighter monetary policy, projecting GDP growth of 6.0 per cent in 2024 and 6.2 per cent in 2025.

This growth will be driven by increased consumer spending, investment, and exports, according to an IMF mission led by Elif Arbatli Saxegaard during their visit to Manila from June 4-10, 2024.

The statement said geopolitical tensions, high interest rates, and climate shocks are challenges to the Philippines’ growth, adding that the country prioritised foreign investment, business reforms, and competitiveness for sustained growth.

The IMF said that the country has took several steps to combat inflation; the BSP hiked rates to 6.5 per cent; the recent reduction of rice import tariffs from 35 per cent to 15 per cent, in addition to a plan to bring down the deficit from 6.2 per cent of GDP in 2023 to 3.7 per cent by 2028.

The agency stressed the importance of prioritising social protection programmes, healthcare coverage, and higher education spending during this consolidation process. It said that improving tax administration and policy changes, especially in VAT efficiency and expanding the tax base, are essential for fiscal consolidation and funding poverty reduction efforts.

The IMF, moreover, applauded the recent measures facilitating foreign ownership in the renewable energy sector and ongoing green finance initiatives as steps towards achieving climate change adaptation and mitigation goals. It expressed gratitude for the open communication with government officials, the central bank, and private sector representatives. They look forward to further dialogue in the upcoming 2024 Article IV Consultation.