2023: An Auspicious Year
Let me greet you a Happy New Year! as we start 2023 on an auspicious note. May this year be kind and favorable to all Filipinos here and abroad.
After the tough challenges of the past three years that made us stronger and better prepared, we are in for some respite. We could not of course totally put down our guard just yet, as we still have to fully overcome the health crisis.
We counted many blessings in the past year, including our resilience that enabled us to surmount the pandemic and the price instability that jolted many nations. The Philippines emerged as one of the fastest-growing economies in the world in 2022, with an average growth of 7.7 percent in the first three quarters.
The common assumption is that we are poised to sustain this growth in 2023, and I believe we have the capability to attain a gross domestic product expansion of 6 percent to 7 percent, in line with the government’s target.
Businesses have a positive outlook, with the Philippine Stock Exchange expecting a bullish run, given the healthy lineup of planned initial public offerings this year, the improving economy and the recovery of the peso against the US dollar.
Those in the travel and tourism sector are equally buoyant, with hotel and airline bookings showing a substantial rebound. Restaurants are full again—it was actually difficult to get reservations on buffet establishments during the holidays.
The Department of Tourism reported that international visitors are back, with arrivals reaching 2.46 million in the first 11 months of 2022. These visitors infused P149 billion worth of tourism receipts into the local economy.
The DOT sees arrivals increasing further to a range of 3 million to 4 million in 2023, which is a good number considering the very low base we are coming from. The Philippines in 2021 received just 164,000 international visitors. The DOT plans to reintroduce the Philippines as a premiere tourist destination, which I think we fully deserve, given the world-class beaches and dive spots spread across the country.
Other sectors of the economy are equally bullish on this year’s prospects. They include the real estate sector, which banks on the sustained expansion of the business process outsourcing industry, the entry of more foreign investors and the recovery of residential demand, thanks to the government’s renewed focus on housing program.
Major banks are highly stable after posting double-digit growth in loans and deposits in 2022 despite the high-interest regime. Retail is also on the mend, as shown by the impressive mall traffic during the holidays. Manufacturing remains in good shape, while the services sector continues to expand. Overall, consumer spending is steadily improving and will continue to fuel the growth of the economy this year.
The consumption on the demand side and services on the supply side contributed largely to the economy’s recovery, with the help of looser restrictions on establishments for food and leisure, transportation facilities, tourist destinations and face-to-face school activities.
The government, which will work on a record budget of P5.268 trillion this year, is more equipped than ever to support the economic expansion in 2023. It adopted a new six-year economic blueprint called the Philippine Development Plan (PDP) 2023-2028 that aims to reinvigorate job creation, accelerate poverty reduction and steer the economy back on the high-growth path.
From what I understand, the six-year plan will address short-term, medium-term and long-term challenges. Among the urgent issues that it identified are the protection of people’s purchasing power, mitigation of the socioeconomic scarring in human capital and ensuring that vulnerable population segments are given targeted assistance.
The medium-term plan focuses on strategies upgrading mobility and connectivity infrastructure, securing energy and water supplies for industries, and creating an enabling regulatory environment for the participation and expansion of the private sector as an engine of growth, high-quality job creation and innovation.
For the long-term, the plan aims to bring the economy back to its high-growth path so that it will attain a high-income status within the next two decades, hopefully.
Specifically, the government hopes to achieve an annual real GDP growth of 6 percent to 7 percent in 2023 and 6.5 percent to 8.0 percent from 2024 to 2028, while keeping inflation within 2.5 percent to 4.5 percent in 2023 and 2.0 percent to 4 percent over the next five years.
Other concrete targets are the lowering of unemployment rate to as low as 4 percent by 2028 and reduction in poverty incidence from 18.1 percent in 2021 to as low as 8.8 percent by 2028. These are big goals that other upper middle-income and advanced economies have realized. Hopefully, we will also become an upper middle-income country by 2024 or 2025.
I am sure the plan contains specific strategies and programs that will put these targets into action beginning 2023 amid the more favorable environment. We have many reasons to be optimistic this year, and I believe we are highly capable of achieving these goals for our family, our community and our nation. Again to our readers, I wish all of us a prosperous New Year!