Despite an expected slowdown of the economy in 2023 because of "still elevated external headwinds," the country will remain comparatively strong, a Cabinet official said.

"We hear talks about the Philippine economy slowing down, along with the global economy, in 2023," National Economic and Development Authority Secretary Arsenio Balisacan said over the weekend.

"After a likely growth of over 7.0 percent in 2022, we may slow down, given still elevated external headwinds and internal challenges, but the economy will remain comparatively strong in 2023," Balisacan said.

China Bank Corporation chief economist Domini Velasquez told the Daily Tribune that she, too, sees the economy slowing down in 2023.

"We think elevated inflation may sap domestic consumption even as high-interest rates may discourage business expansions, while a global economic slowdown will reduce appetite for our exports," Velasquez said.

"In 2023, we think GDP growth will settle between 5.5 and 6 percent, lower than the government's target and this year's economic performance," she added.

Moreover, Michael Enriquez, president and chief investment officer of Sun Life Investment Management and Trust Corp., said, "I agree that because of higher than expected growth this year, it may be more tempered next year as spending habits start to normalize amidst higher cost of goods and services."

Headwinds

Furthermore, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the headwinds include the risk of recession in the US — the world's biggest economy — with a consequent dire scenario of reduction in global trade, investments, employment, remittances, and overall global business activities.

"Higher prices, inflation, and interest rates would remain the biggest drags to the local economy," Ricafort added.

Meanwhile, where Finance Secretary Benjamin Diokno is concerned, the Philippines will not go into recession.

"I can assure you that given the data that we have, under very extreme conditions, we will not have a recession because we have a very young population," Diokno said during a Commission on Appointments committee hearing on his ad interim appointment.

"For example, our unemployment rate is now down to five percent — the lowest since the pandemic. So, I can assure you, given our focus on agriculture, restored mining, power industry, and a manufacturing sector that is working well plus the increased quality of our overseas workers, I don't think we'll have a recession," he added.

The DoF chief also reiterated that the country's debt is still manageable. "Our public debt is manageable, and it should not be a cause for concern," he said.

Diokno said anew that the Philippine debt-to-GDP (gross domestic product) ratio has increased from 40 percent pre-pandemic to 62 percent during the pandemic because of vaccine procurement and improvement of health services, among other factors.

"That should not be a cause for concern — 62 percent," Diokno said. That's very manageable compared to other countries (whose) debt -to-GDP ratio is 200 percent."