Citi economist Chutchotitham said the Philippine economy is expected to post a 6% fourth quarter of 2024 from the 5.2% in the third quarter, with strong domestic demand, easing inflation, and reduced policy rates fueling it.
Chutchotitham said the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or CREATE MORE, is expected to boost private sector investments and foreign direct investments.
CREATE MORE introduced key reforms such as reducing the corporate income tax rate from 25% to 20%, increasing deductions for power expenses, and streamlining the value-added tax refund.
The Bangko Sentral ng Pilipinas had a key role in spurring economic growth as it cut policy rates by a total of 50 basis points this year. On the RRR, the central bank had also lowered it by 250 basis points, which further penetrated banks with more liquidity and helped in the strong credit expansion.
Inflation stands at 2.3% in October, within the government’s target range of 2–4%. So, it would boost consumer spending and business activity further.
Chutchotitham also believes that the government’s projects for infrastructure are to speed up these two quarters of 2024 and the first quarter of 2025, which will accelerate economic activity further.”.
The Philippine economy, in turn, is seen to grow 5.8% for the full year of 2024 and climb further to 6% in 2025, indicating a steady recovery and expansion trajectory.
