Executive Search in Philippines – 2020 Outlook
2019 Budget Delay Adds GDP Boost to 2020
Philippines GDP growth is expected to accelerate in 2020 driven by government spending following the timely passage of the 2020 budget plus approval for extension of the delayed 2019 budget for implementation in 2020.
The 5-month delay in the approval of the 2019 budget is expected to result in the slowest GDP growth since 2011, estimated at below 6%. GDP growth is expected to recover to above 6% in 2020 with the Philippines continuing to be among the fastest growing countries in the region.
Growth in 2020 will be driven by government infrastructure spending and private consumption. Healthcare expenditures are also expected due to additional taxes on liquor and tobacco products. Growth sectors for 2020 are banks, real-estate and conglomerates.
The Philippines Central Bank has been supportive of growth. With inflation tamed, the Central Bank moved quickly by cutting the commercial bank reserve requirements and policy rates. Inflation outlook looks benign and thus the Central Bank has said that it will continue reducing the reserve requirement down to single digits by 2023 to support credit growth and domestic liquidity to further help drive economic growth.
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