Philippines shakes off inflation for best growth since 1976

The Philippines weathered the fastest inflation and highest policy rate in 14 years to deliver one of Asia’s strongest expansions, shoring up the economy by the most in decades amid a bleak global outlook.

Gross domestic product in the three months through December grew 7.2% from a year earlier, the Philippine Statistics Authority said Thursday, versus a median estimate for a 6.6% advance in a Bloomberg survey. Output rose 2.4% compared to the previous quarter.

For the full year, GDP expanded 7.6% in 2022, surpassing the 7.4% survey median. That’s the best annual performance since 1976, according to National Statistician Dennis Mapa. Services and consumption drove the Southeast Asian economy last year as the reopening after the peak of the pandemic spurred travel and dining out.

The government is confident that the economy will remain on a high-growth trajectory, Arsenio Balisacan, secretary at the National Economic and Development Authority, said at a briefing Thursday. Philippine stocks rose as much as 0.3% while the peso traded 0.2% higher against the dollar after the data. 

China’s reopening will be a boon to the Philippines, Balisacan said.

The country is poised to keep on growing near 7%, President Ferdinand Marcos Jr. said in an interview earlier this month, optimistic that the country can overcome the challenges of a slowing global economy. South Korea, a bellwether for the global economy given its dependence on trade, saw its economy shrink last quarter.

Last quarter’s print showed that domestic demand held up even as inflation bolted to the fastest since 2008 that led to the most aggressive monetary tightening in two decades. Price gains are expected to cool in the coming months, giving the central bank room to end the rate hike cycle this quarter, Governor Felipe Medalla said last week.