THE Philippine economy grew slower last year compared to 2022 as it was hit by high food prices and weakness in overseas markets. 

The 5.6 percent expansion was well down from the 7.6 percent seen in 2022, based on data released by the Philippine Statistics Authority on Wednesday. 

It was “below our target of 6-7 percent for 2023”, National Economic and Development Authority Secretary Arsenio Balisacan told reporters.

“We are concerned about the low growth in food spending due to high food prices,” he said, with a serious seasonal dry spell in most of the country expected to hit the laggard farm sector in the early part of this year.

”Moving forward, we need to relentlessly manage elevated food prices, particularly improving the efficiency and resiliency of the agriculture value chain, utilizing strategic trade policy when domestic production is inadequate, and preventing anti-competitive practices in the marketplace,” Balisacan added. 

The services sector, household spending, construction, and durable equipment were the key growth drivers, national statistician Dennis Mapa told reporters.

”We expect growth in services to maintain its trajectory as international tourism rebounds. We will present international tourists with a pleasant travel experience, beginning with improved airport services, simplified travel requirements, and most especially, a diverse range of tourism products,” Balisacan said. 

But export growth slowed sharply to just 0.6 percent in the fourth quarter, compared with 5.0 percent a year earlier.

Balisacan added that the government would maintain its 2024 target of 6.5–7.5 percent, a figure analysts warned was too optimistic given the expected weaker global prospects.

“The domestic demand figures suggest that the economy is holding up well against the sharp rise in borrowing costs. But we don’t expect this resilience to last,” said Shivaan Tandon at Capital Economics.

with a report from Agence France-Presse