The Philippine economy grew by 7.2 percent in the fourth quarter of 2022, bringing the full-year gross domestic product (GDP) growth to 7.6 percent, which is the highest recorded full-year growth in 46 years. This surpasses the Development Budget Coordination Committee (DBCC)’s growth assumption of 6.5 to 7.5 percent for 2022.
This GDP outturn beats the median forecasts of private analysts (7.5 percent) and economic projections by the International Monetary Fund (IMF) (6.5 percent), the World Bank (WB) (7.2 percent), ASEAN+3 Macroeconomic Research Office (AMRO) (7.3 percent), and the Asian Development Bank (ADB) (7.4 percent).
“Our 46-year high full-year growth rate of 7.6 percent in 2022 is astounding, but not surprising. A bright jobs market and consistently high domestic demand, driven by strong household consumption and growing investments, have continued to lift our economy to heights that surpass major emerging economies in the Asia Pacific region,” said Finance Secretary Benjamin Diokno.
Q4 2022 GDP
Among major economic sectors, Services and Industry increased by 9.8 percent and 4.8 percent, respectively. Growth in Services was driven by Trade and Financial and insurance activities while Manufacturing and Construction fueled Industry growth.
Meanwhile, the agricultural sector contracted by 0.3 percent as growth in sugar, poultry and livestock was offset mainly by lower production in palay, fisheries, and corn, partly due to typhoons and elevated input costs.
Domestic demand likewise expanded. It was led by Household consumption (7.0 percent), fueled by improving labor and employment conditions and stronger growth in overseas Filipino remittances.
Gross capital formation (5.9 percent) also increased mainly due to corporations and household construction. Meanwhile, Exports and Imports of goods and services grew by 14.6 and 5.9 percent, respectively.
The Philippine economy grew much faster than that of China (2.9 percent) and Vietnam (5.9 percent).
2022 full-year GDP
All the major production sectors registered positive growth, with Services (9.2 percent) in the lead, followed by Industry (6.7 percent), and Agriculture (0.5 percent). This suggests broad-based expansion despite the increase in international and domestic commodity prices.
The expansion in domestic demand was largely due to Household consumption (8.3 percent) and Gross capital formation (16.8 percent). The expansion in total investment was driven by corporations and general government construction and spending on durable equipment. Exports also grew by 10.7 percent, but was outpaced by the 13.1 percent growth in Imports.
For the full-year of 2022, the Philippine economy grew faster than the reported growth rate for China, which is at 3.0 percent.
Measures for sustained growth
“As we expect a gloomy world economic outlook in 2023, we will remain vigilant and alert to ensure the Philippines remains resilient and continues on its path towards economic growth amid looming global uncertainties,” said Secretary Diokno who earlier expressed his confidence that the Philippines will achieve its growth targets for 2022.
The government will closely monitor the impact of the global economic slowdown and effects on the economy to ensure the country’s readiness for various external threats posed by global uncertainties.
Moreover, as investment expenditure continues to be a major thrust for the Philippines’ road to recovery, efforts to close the infrastructure investment gap through improvements in bureaucratic and absorptive capacity and efficiency will be intensified.
To this end, the government commits to a fiscal consolidation path guided by the Medium-Term Fiscal Framework (MTFF) to reduce the fiscal deficit and help maintain fiscal sustainability and macroeconomic stability.
Accompanied by the Philippine Development Plan (PDP) 2023-2028, the government will execute strategies that will steer the country towards a path that provides inclusive growth, equal opportunities, and windows to participate in an innovative and globally competitive economy.