The International Monetary Fund (IMF) maintained its economic growth forecast for the Philippines at 6.1 percent this year and 6.3 percent in the next.

This was shared in the IMF World Economic Outlook Update released last Friday. The IMF previously announced economic outlooks in October 2024.

The IMF said growth will be driven by easing inflation, investments in infrastructure and technology, and continuous trade with China and its improving economy.

China was the second largest export market for the Philippines last November, accounting for 13 percent of all exports and contributing $786.35 million in export income.

Meanwhile, the Philippines continued to ensure enough supplies of goods from China to prevent local inflation spikes as Chinese imports reached the highest volume at 27 percent of all Philippine imports.

However, IMF Economic Counselor Pierre-Olivier Gourinchas said US trade policies under the Trump administration, such as a possible 60 percent tariff on Chinese imports, might reduce earnings of Chinese manufacturing workers and ultimately, household demand for imported goods.

“Any weakness in Chinese growth is having spillovers to many emerging and developing countries that are having trade relationships with China and are exporting to China,” he said.

Nevertheless, Gourinchas said the Trump administration will likely adjust policies to prevent higher global inflation in the long term due to possible shortage of raw materials and higher costs of labor in the US.

“In the medium term, the risks are more uniformly to the downside. Curbs on migration and protectionist policies will weigh on potential output,” Gourinchas said.

The IMF sees global inflation declining to 4.2 percent this year and to 3.5 percent in 2026 as the US government adjusts policies toward a less inflationary environment and developing countries increase supplies of goods and services through investments in infrastructure and social services.

Infra corners 6% of GDP

The Marcos administration aims to sustain infrastructure spending at 5 to 6 percent of gross domestic product each year.

The Bureau of the Treasury reported the government’s outstanding debt rose by 0.4 percent to P16.09 trillion as of end-November 2024 to fund its various projects.

To prevent credit risks and support its projects, the Department of Finance (DoF) said it will raise tax and non-tax collection efforts, building on the possible above-target total revenues of P4.42 trillion for last year.

DoF reported it already collected P3.77 trillion as of October, reflecting a 16.8 percent growth from the level in the comparable period in 2023.

Tech boom persists

Given the Philippines’ growth outlook and those of the US and China, the IMF expects the global economy to grow at 3.3 percent this year and the next.

However, the IMF said the projected rate is slower than the average growth recorded from 2000 to 2019.

Gourinchas said the US will mostly benefit from investments in the technology sector as more global consumers prefer digital products and services.

“The US experienced persistently stronger productivity growth than Europe, especially in the technology sector, linked to a favorable business environment and deeper capital markets,” Gourinchas said.

According to McKinsey, artificial intelligence and machine learning could raise the banking sector’s income to over $1 trillion.

Other major beneficiaries of AI adoption include the energy, media, retail, business and legal services, and healthcare sectors.

Nasdaq, the world’s stock market for technology firms, showed stable growth in US-listed firms with 1.51 percent increase as of 17 January.