FMIC predicts 6% GDP growth for 2024.

FMIC Forecasts Philippine Economy to Grow Faster in 2023

In a press briefing, President Jose Patricio Dumlao of First Metro Investment Corporation (FMIC), the investment banking arm of Metrobank, announced that the corporation expects the Philippine economy to grow faster this year and continue to be among the best performing economies in Asia.

Dumlao stated that despite domestic and global challenges, the Philippine economy achieved a commendable 5.5% GDP growth in the first nine months of 2023, driven by strong domestic demand.

The FMIC president also noted that they anticipate external headwinds, with global growth outlook remaining subdued. However, he expressed confidence in the country’s economy, with its strong macroeconomic fundamentals, and projected an expansion of 6.0 percent.

He highlighted that growth will be fueled by robust private consumption, increased government infrastructure spending, a strong labor market, and the recovery of domestic tourism.

Additionally, Dumlao mentioned that the country’s external sector remains stable, with manageable external debt, decreasing debt-to-GDP ratio, and substantial Gross International Reserves (GIR) exceeding $100 billion.

In terms of inflation, FMIC expects it to ease to 3.8 percent this year, aligning with the Bangko Sentral ng Pilipinas target range of 2.0 percent to 4.0 percent, providing respite for household income.

The peso is projected to trade within the P56 to P58 range against the dollar, and interest rates are anticipated to decline underpinned by a decrease in inflationary pressure.

On the equity side, FMIC predicts that the potential easing of bond yields should boost the attractiveness of the stock market, encouraging issuers to consider equity issuances as a valuable alternative for capital raising. The Philippine Stock Exchange Index (PSEi) is expected to stage a recovery this year, hitting 7,000 to 7,500 supported by earnings per share (EPS) growth of 11 percent and a price-to-earnings range of 12.6 times to 13.6 times.

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