IMF Commends Economic Team for Strong Recovery from Pandemic

DBM PRESS RELEASE

The International Monetary Fund (IMF) commended the Philippine Economic Team for the country’s economic performance in its report following the conclusion of the IMF Staff 2023 Article IV Mission to the Philippines yesterday, October 3, 2023.

The end-of-mission report confirmed that "the Philippine economy has emerged from the pandemic strongly." It commended the on-point strategies of the Philippine Economic Team led by Finance Secretary Benjamin E. Diokno, saying: "Fiscal consolidation as envisaged under the Medium-Term Fiscal Framework is on track, reflecting a strong revenue performance and lower current spending, and its pace is appropriate to bring the national government debt-to-GDP ratio to less than 60 percent over the medium term."

It also commended the efforts towards Public Private Partnerships as this leads to more investments: "The renewed emphasis on financing the country’s infrastructure gaps through Public Private Partnerships (PPPs) is well placed and the new PPP Code is welcome in this regard. The reform of the mining fiscal regime and Mining Act provides an opportunity to enact a progressive and unified tax system, and a competitive investment regime."

It also highlighted the potential of the Maharlika Investment Corporation, the country's first Sovereign Development Fund: "The Maharlika Investment Corporation (MIC) could contribute to the push for closing infrastructure gaps and green investments by following best practices in strategic investment management and accountability frameworks."

The Bangko Sentral ng Pilipinas was also praised for its handling of the inflation crisis: "Decisive monetary tightening and moderate minimum wage hikes helped mitigate inflationary pressures, with headline inflation now expected to return to the BSP’s target band by the first quarter of 2024."

The IMF attributed economic challenges to persistently high global inflation, an abrupt global slowdown putting downward pressure on goods and services exports, an intensification in geo-political tensions, and depreciation pressures stemming from capital outflows under volatile market conditions. It recommended a more ambitious revenue