High Employment Record and Easing of Inflation to Boost Economy Growth in 2024

The record-high job rate and declining inflation would encourage consumer spending even more this year, propelling the Philippine economy’s quicker growth.

First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P) stated in the February issue of The Market Call that in 2024, consumers will have more purchasing power due to the record-low unemployment rate, all-time high employment rate, and milder inflation.

The employment rate increased to 96.9 percent while the unemployment rate dropped to 3.1% in December last year making it the lowest level recorded since 2005.

Meanwhile, headline inflation decreased even more to 2.8 percent in January of this year, coming in well below the 2 to 4 percent goal range set by the Bangko ng Sentral ng Pilipinas (BSP).

According to FMIC and UA&P forecast, inflation will come to 3.8 percent this year as crude oil prices are slightly lower and imports and much better half harvests limit the rice price increases.

The report stated “The economy had a fast start in 2024 as new record employment and all-time lows in unemployment closed the previous year.”

In addition it cited, “The two factors together should boost consumer spending, apart from sustained infrastructure spending by the government.”

FMIC and UA&P noted that infrastructure investment will continue to surpass 5.0 percent of GDP as the reduced debt-to-GDP of 59.0 percent provides some fiscal space.

In addition to these growth factors, the report stated that manufacturing growth is anticipated to pick up speed.

FMIC and UA&P mentioned that the Philippine economy is expected to increase by at least 6.0 percent this year from 5.6 percent last year.