MANILA - The ASEAN+3 Macroeconomic Research Office on Tuesday downgraded its forecast for the Philippine economic growth this year while raising its inflation estimates.

The Philippine economy could grow by 6.2 percent this year, down from the earlier forecast of 6.3 percent, AMRO said. But even though its growth forecast was reduced, the agency said the Philippines would remain a strong performer in the region.

For 2022, the growth outlook was raised upwards to 7.3 percent from 6.9 percent.

AMRO Chief Economist Dr. Hoe Ee Khor said the Philippines remains a bright spot, after proving its resilience against higher policy rates and elevated borrowing costs.

“We were not very sure how well the economy will do because the central bank was tightening policy. But it turns out the economy has been very resilient. That is why we have revised up the growth rate from 6.9 to 7.3 percent," he said.

AMRO's forecast for the ASEAN+3, including China, Japan and Korea, was also reduced to 4.3 percent from 4.6 percent. For the ASEAN region, the growth outlook was lowered to 4,8 percent from 4.9 percent, it said.

In terms of inflation, AMRO now expects Philippine inflation to reach 4.3 percent in 2023 while ASEAN+3 inflation forecast was raised to 4.5 percent from 3.4 percent.

But Khor said the Bangko Sentral ng Pilipinas is well positioned to fight inflation.

“Then the central bank should focus on inflation and countering inflation, and I think that is what the BSP has been doing. The Governor has mentioned there could be another 25-50 bps before they end their tightening cycle. The plan is also to reduce the RRR by 100 bps. But they will only do that once they see signs of inflation easing come out," he said.

The Development Budget Coordination Committee’s growth forecast for 2023 is a growth of 6 to 7 percent. Its inflation outlook is 2.5 to 4.5 percent. These forecasts were released in December 2022.

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