Q4 GDP Slightly Better Than expected, Although Full Yr 2023 Growth Below Govt Target

Earlier Q4 Philippines Q4 GDP data printed stronger than expected. Q/Q growth was 2.1%, versus 1.7% expected (prior was 3.8%, also firmer than the initial 3.3% estimate). Y/Y momentum was 5.6% versus 5.2% forecast, albeit down slightly from the 6.0% Q3 Y/Y pace. 2023 growth as a whole stood at 5.6% (versus 7.6% in 2022).

• In terms of expenditure details, government consumption (-1.8% y/y) and exports (-2.6% y/y) were the main drags. Private consumption and investment added to growth. By sector there were no negative y/y prints, although manufacturing continued to ease, back to 0.6% (from 1.8%), construction slowed from Q3, back to 8.5% y/y.
• Philippines NEDA Secretary Balisacan spoke and stated that infrastructure spending will accelerate. Concerns were highlighted around food consumption, while risks come from El nino and external developments. Balisacan added that moderating interest rates can boost consumption.
• The full year growth figure (5.6%) was below the government's 6-7% target. Balisacan stated the government was sticking with its 6.5-7.5% growth target for 2024.
• Overall, the data is unlikely to concern the BSP too much and warrant a near term dovish shift.
• Equity sentiment is positive today, the PCOMP up 1.3%, to fresh highs since May last year.
• USD/PHP is relatively steady though, last tracking slightly stronger in PHP terms, near the 56.36 level.