NEW YORK CITY, USA – Finance Secretary Benjamin E. Diokno has highlighted the Philippines’ faster economic growth and brighter prospects in a conversation with global news agency Reuters on November 9, 2023 in New York.
Reuters NEXT is an annual live journalist event led by Editor-in-Chief Alessandra Galloni, where Reuters correspondents speak to global policymakers, business leaders, and forward thinkers to tackle the greatest challenges and opportunities facing society, business, and the world at large.
Secretary Diokno’s session was moderated by Emerging Markets Correspondent Rodrigo Campos.
During the interview, Secretary Diokno highlighted that the Philippine economy’s faster GDP growth of 5.9 percent in the third quarter (Q3) of 2023 and year-to-date (YTD) average growth of 5.5 percent is the strongest among economies in Asia.
“That’s the fastest growing economy in that part of the world, faster than China, Indonesia, Malaysia, Vietnam, etcetera,” Secretary Diokno said.
Asked whether the country could attain its GDP growth target of 6 to 7 percent in 2023, Secretary Diokno noted that this is doable if the economy expands by 7.2 percent in the fourth quarter.
He pointed out several indicators that would help further drive economic growth.
For instance, the country’s stronger growth figure for Q3 reflects the intensified implementation of the national government agencies’ catch-up plans to reverse government underspending in the first quarters of 2023, which mainly slowed down the economy.
“The economy slowed down because of the underspending of the government, but it has picked up. So that’s no longer a problem,” Secretary Diokno said.
He also noted that the country’s inflation rate has eased and continues to decelerate for the remaining months of 2023. It is projected to stay within the government’s target range of 2 to 4 percent in 2024 and 2025.
“We expect the inflation forecasted by the Central Bank of the Philippines to be within the target range of 2 to 4 percent by the first quarter of next year and 2025 also, so we’re on target. So it’s coming down. We have adopted several measures – food and non-food – and it’s mostly the food items that are still out of the range,” Secretary Diokno said.
Secretary Diokno shared the government’s efforts to mitigate the effects of inflation on vulnerable sectors such as jeepney drivers, farmers, and fisherfolk through targeted food and fuel subsidies.
Meanwhile, he reiterated that infrastructure investments, which have high multiplier effects on the economy, are at the top of the Marcos, Jr. administration’s agenda.
The government intends to maintain infrastructure spending at 5 to 6 percent of GDP annually.
The government has made necessary reforms to the country’s public-private partnership (PPP) policy framework, including the PPP Code, to fully harness PPPs as an additional financing mode for infrastructure projects and pave the way for high-quality and cost-effective infrastructure in the country.
The Philippines currently has 197 infrastructure flagship projects (IFPs), 30 percent of which are ready for PPPs.
Secretary Diokno added that the Philippines’ Maharlika Investment Fund (MIF) – the country’s first-ever sovereign wealth fund – could help finance more big-ticket infrastructure projects. The Fund is set to be operational before the end of the year.