With Asian exports collapsing as the global recession continues to deepen, the Asian Development Bank (ADB) will likely scale down further its 2009 growth forecast for the region's developing economies, including the Philippines, a senior economist of the institution said on Wednesday.
The Manila-based bank's Asian Development Outlook (ADO) report that will come out in April will present "more pessimistic" growth projections for the region, with the average growth forecast this year likely to be cut from 5.8 percent, said assistant chief economist Joseph Ernest Zveglich Jr.
"At this point, it does appear that 5.8 percent is probably a full percentage point higher than what we'll likely see this year," he said.
Zveglich, who was guest speaker at the general membership meeting of the Financial Executives Institute of the Philippines (Finex), said the global economy is not expected to stage a strong recovery until after 2010.
Asian countries highly dependent on exports will experience negative growth this year, but the new ADB projections will not be available until April, he said.
In an interview with the BusinessMirror after his speech, Zveglich said the ADO 2009 will likely show sharply lower growth projections for many countries.
He declined to give any growth estimate for the Philippines, but he stressed: "There will likely be a downscaling of projections across the board."
The ADB in December cut its growth forecast for the region to 5.8 percent, from the 7.2-percent projection announced in September, which only took into account a global slowdown and not a global recession, Zveglich said.
The global recession is likely to be deeper and more prolonged than initially expected, he said.
"We're now seeing fourth-quarter results in the US and Europe and there isn't much good news to talk about," he said. Echoing the key message brought across by the bank's ADO 2008 report, Zveglich said Asia's developing economies remain heavily reliant on the G-3 economies (US, euro zone and Japan) and have not uncoupled from the industrial countries' business cycles despite increased intraregional trade.
In September last year the ADB cut its 2009 growth forecast for the Philippines to 4.7 percent, from the previous projection of 6.2 percent, given expectations that exports would weaken.
The Philippine government is aiming for a growth of between 3.7 percent and 4.7 percent in the country's gross domestic product, but several institutions now consider this target ambitious given falling exports.
DBS Bank, Southeast Asia's biggest lender, has lowered its GDP growth estimate for the Philippines this year to 2.5 percent from 3.8 percent, in line with the drastic revisions of its forecasts for nine other countries in Asia.
The International Monetary Fund, meanwhile, expects Philippine GDP to grow at less than 3 percent.