The Philippines is in a 'labor boom,' economist says
Summary
TLDRThe speaker discusses the impact of rate hikes on investment and consumption, noting that personal spending is at its slowest since the 2012 financial crisis. Despite this, the strong labor market in the Philippines, with 3 million additional workers, may offer a soft landing. The country is expected to be the fastest-growing economy in Southeast Asia in 2023 and second-fastest in 2024. External challenges include deflationary pressures from a slower recovery in China, which could help manage inflation across Asia.
Takeaways
- 📈 The speaker anticipates that rate hikes will impact both investment and consumption, with personal spending growing at its slowest pace since the 2012 global financial crisis.
- 🏦 Bank lending has also slowed down to its slowest rate since the 2008 financial crisis, which will influence economic growth in the fourth quarter of 2023 and the first half of 2024.
- 💼 Despite economic challenges, the labor market in the Philippines is robust, with an employment boom that surpasses demographic trends, suggesting a strong workforce contributing to the economy.
- 🌟 The Philippines is expected to be the fastest-growing economy in Southeast Asia in 2023 and the second fastest in 2024, following Vietnam, even with aggressive monetary tightening.
- 🌐 External challenges such as deflationary pressures from a slower recovery in mainland China could affect Southeast Asia, potentially leading to increased competition and deflationary forces in the region.
- 🏭 Factories in mainland China are seeking new markets, which could introduce additional competition and have a deflationary impact on prices of goods across Asia.
- 🛑 The speaker highlights the need to monitor the labor market closely as a key factor in how the Philippines will navigate through the rate hikes and potential economic downturns.
- 📉 The speaker suggests that the deflationary forces could help manage inflation better, as the competition from mainland China may lead to lower prices for goods.
- 🔍 The speaker advises keeping an eye on the unfolding risks to seaborne oil flows from the Middle East, which could have broader implications for the region's economies.
- 🌱 The Philippines' economic resilience is attributed to its strong labor market, which is expected to provide a soft landing amidst economic challenges.
Q & A
What is the expected impact of rate hikes on investment and consumption?
-Rate hikes are expected to take a toll on both investment and consumption, with personal spending growing at its slowest pace since the global financial crisis.
How has bank lending been affected by the economic conditions mentioned?
-Bank lending has slowed down to its slowest pace since the global financial crisis.
What is the projected economic growth for the Philippines in the fourth quarter of 2023 and the first half of 2024?
-Economic growth is expected to decrease in the fourth quarter of 2023 and throughout the first half of 2024 due to the mentioned factors.
What is the current state of the labor market in the Philippines?
-The labor market in the Philippines is very strong, with the country experiencing a labor and employment boom.
How many people are currently working in the Philippines, according to the transcript?
-There are 3 million people currently working in the Philippines, which is above the demographic trend.
What does the transcript suggest about the Philippines' economic growth despite rate hikes?
-Despite the most aggressive tightening in Southeast Asia, the Philippines is expected to be the fastest-growing Asian economy in 2023 and the second fastest in 2024.
What external challenges are mentioned in the transcript that could affect Southeast Asia?
-External challenges include risks to seaborne oil flows from the Middle East and deflationary pressures from a slower recovery in mainland China.
How might the competition from mainland China impact Southeast Asia?
-The competition from mainland China, as factories look for markets beyond China, could introduce a deflationary force across Asia, potentially helping to manage inflation better.
What is the expected effect of deflationary pressures on the prices of goods in Asia?
-Deflationary pressures could help manage inflation better, potentially leading to more stable or lower prices for goods in Asia.
What is the transcript's overall outlook for the Philippines' economy in the face of these economic challenges?
-The transcript suggests that despite economic challenges, the Philippines' strong labor market and employment boom could provide a soft landing, and it is expected to maintain strong economic growth in the region.
Outlines
📉 Economic Impact of Rate Hikes and Labor Boom in the Philippines
The speaker discusses the potential negative effects of rate hikes on investment and consumption, referencing the slowest personal spending growth since the 2008 global financial crisis and the subsequent decline in bank lending. Despite these challenges, the labor market in the Philippines is experiencing a boom, with 3 million additional people working beyond demographic predictions. This employment surge is expected to cushion the economy during rate hikes, allowing the Philippines to remain the fastest-growing economy in Southeast Asia in 2023 and the second-fastest in 2024, after Vietnam. External challenges, such as deflationary pressures from a slower recovery in mainland China and potential risks to seaborne oil flows from the Middle East, are also considered. These factors could contribute to better inflation management across Asia, as competition from Chinese factories seeking new markets may lead to lower prices for goods.
Mindmap
Keywords
💡Rate hikes
💡Personal spending
💡Bank lending
💡Labor market
💡Demographic trend
💡Soft Landing
💡Southeast Asia
💡Deflationary pressures
💡Mainland China
💡Inflation
💡Economic growth
Highlights
Rate hikes are expected to impact both investment and consumption.
Personal spending is growing at its slowest pace since the global financial crisis.
Bank lending has slowed to its slowest pace since the global financial crisis.
Growth is projected to decline in Q4 2023 and the first half of 2024 due to these factors.
The Philippine labor market is exceptionally strong, indicating a labor boom.
There are 3 million more people working than demographic trends would suggest.
The increased workforce is expected to provide a soft landing for the economy during rate hikes.
Despite aggressive tightening, the Philippines is predicted to be the fastest-growing economy in Southeast Asia in 2023.
The Philippines is expected to be the second-fastest growing economy in Asia in 2024, after Vietnam.
External challenges, such as risks to seaborne oil flows from the Middle East, need to be considered.
Deflationary pressures from a slower recovery in mainland China could impact Southeast Asia.
Factories in mainland China seeking new markets may introduce additional competition in Asia.
This competition could be deflationary and help manage inflation across Asia.
The transcript discusses the potential for a softer landing due to strong employment numbers.
The transcript also addresses the impact of external factors on Southeast Asia's economy.
The transcript suggests that competition from mainland China could have deflationary effects.
Transcripts
I do think that rate hikes will take a
toll not just on investment but also on
consumption um just to just two data
points to keep in mind
one con personal spending person
household consumption spending is this
growing the slowest um ever since 2012
ever since the global financial crisis
Bank lending too has slowed down um to
its again slowest Pace um since the
global financial crisis and both these
factors will drive growth down in the
fourth quarter of 2023 and in throughout
the first half of 2024 but one important
fact that I think need people need to
notice or people need to monitor is the
fact that the labor market in the
Philippines is just really so strong we
are in a labor boom we are in an
employment boom um there are 3 million
people working now of that that is above
what the demographic trend would suggest
so with more hands on Deck with more
people working hard contributing the e
to the economy this would provide the
Philippines some sort of a soft Landing
throughout its rate hikes and we do
think that even despite the most
aggressive tightening in Southeast Asia
the Philippines will be the fastest
growing Asia asan economy in 2023 and
the second fastest growing economy in
2024 next to Vietnam yes what about the
external challenges and any notion of
moderating in
this applies to the entirety of
Southeast Asia is that guaranteed given
the unfolding risks to Seaborn oil flows
from the Middle
East I think there's one thing that
needs to be considered is the
deflationary pressures from um a slower
recovery from mainland China of course
uh with factories in mainland China um
looking for markets not just in China
but all around um Asia and all around
Asia this additional competition is
southeast Asia will be able is a
deflationary for uh def deflationary
Force across Asia across asan and which
would um know help manage inflation
better when it comes to the prices of
goods
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