Standard Chartered projects 5.3% growth for PH economy

For next year, Koh said they are expecting the Philippine economy to grow by 6.0 percent and further accelerate to 6.5 percent in 2025. (File Photo: JC Gellidon/Unsplash)

MANILA — Standard Chartered on Friday maintained its 5.3 percent economic growth outlook for the Philippines this year.

In a virtual briefing, Standard Chartered economist for Asia Jonathan Koh said growth is likely to slow over the next few quarters as the transmission of earlier monetary policy tightening continues.

However, Koh said the 5.3 percent projected growth is still “one of the strongest in the region.”

“I think as monetary policy transmission continues through the system, growth in the second half of the year on a sequential basis is probably also going to remain soft,” he said.

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) raised interest rates by a total of 425 basis points since last year to temper the rising inflation.

Aside from the monetary policy tightening, Koh said consumption is expected to moderate in the coming months even as it remains a key driver of growth.

“So going forward, I do think that the pace of consumption growth is probably going to remain a little bit more on the softer side even though it’s still supportive of overall growth,” he said.

Koh said the investment outlook for the second half of the year also remains challenging due to high interest rates.

Koh, however, said the BSP will reduce rates by 25 basis points in the fourth quarter of the year amid slowing growth momentum and easing inflation.

He said the BSP will likely further cut rates by another 50 basis points each in the first, second and third quarter of 2024, bringing the real policy rate to settle between 1.5 to 2.0 percent.

Inflation, meanwhile, is projected to fall below 4 percent in the fourth quarter of the year and average to 5.6 percent this year.

For next year, Koh said they are expecting the Philippine economy to grow by 6.0 percent and further accelerate to 6.5 percent in 2025.