A visiting team from the International Monetary Fund (IMF) told House leaders on Thursday that growth for the Philippine economy would pick up its pace in the second half of 2023 and even faster next year.
Speaker Ferdinand Martin G. Romualdez, in a statement, expressed satisfaction over this projection of the visiting IMF team.
During a meeting with the lower chamber last Wednesday, Romualdez said the IMF, led by mission chief Mr. Jay Pereis, claimed the Philippine economy has the potential to catch up in the second half of the year and faster growth in 2024, despite signs of a global slowdown compared to 2023.
The moderate pace of 4.3 percent of the country’s gross domestic product (GDP) in the second quarter brought real GDP growth to 5.3 percent for the first semester of the year, but economic managers are confident the target growth rate of 6-7 percent remains attainable.
“This forecast is not only encouraging but also a testament to the resilience and hard work of our nation’s people, as well as the sound economic policies and reforms implemented by the administration of President Ferdinand R. Marcos Jr.,” said Romualdez.
“This positive outlook from the IMF should serve as motivation for us all to redouble our efforts in revitalizing our economy. It is a reminder that our nation has the potential to rebound and emerge stronger from any adversity,” he added.
Among others, Romualdez said the IMF team cited the expected early enactment of the 2024 national budget as well as various laws providing an improved competitive edge to the country in terms of attracting foreign direct investments.
The IMF team said, “the early passage of the budget could make a big difference” as funds for infrastructure projects and social amelioration can be frontloaded in the first quarter to offset the effect of low government spending.
Among the key factors cited by the IMF team for the positive outlook are the passage of the following laws to attract more foreign direct investments: the Foreign Investment Act—allowing first-time foreign investors to fully own domestic enterprises in the Philippines; the Retail Trade Liberalization Act—reducing the minimum paid-up capital requirements for foreign retail enterprises; and the Public Services Act—whereby foreign investors can now own 100 percent of public services projects in the country.
According to the Office of the Speaker, the IMF team also noted the impending enactment of other measures meant to make the country an ideal destination for foreign direct investments: amendments to the Build-Operate-Transfer (BOT) law and the Fiscal Regime for the Mining Industry Act.
The IMF team said the measure, which gives the government a fair and increased tax take from mining while ensuring the competitiveness, attractiveness, and sustainability of the country’s mining industry, can greatly contribute to the country’s economic growth.
The Philippines is the fifth most mineralized country in the world, with an estimated $1 trillion in untapped reserves of copper, gold, nickel, zinc, and silver.
However, the Speaker said the country must improve its processing capability and not just export raw ore.
Meanwhile, the IMF team said it would be a “very good idea” for the Philippines to train and capacitate its workforce for the increasing use of artificial intelligence, particularly in the business process outsourcing industry, where the country has a competitive advantage.
In addition, the IMF team recommended further improving regulations to hasten the processing of permits and documentation required for investments and businesses, as well as the implementation of laws against money laundering.
“We understand that there is still work to be done to ensure this projection becomes a reality. The government will continue to focus on policies that promote economic stability, job creation, and sustainable growth,” Romualdez said.
“We will also work to improve the investment climate and further enhance our economic resilience in the face of external shocks,” he added.