ADB maintains PH growth outlook, downgrades forecast for Southeast Asia


Posted at Jul 19 2023 09:17 AM | Updated as of Jul 19 2023 10:31 AM

Pedestrians cross an intersection in the Makati Business District on October 6, 2022. George Calvelo, ABS-CBN News/FILE
Pedestrians cross an intersection in the Makati Business District on October 6, 2022. George Calvelo, ABS-CBN News/FILE

MANILA – The Asian Development Bank (ADB) on Wednesday maintained its growth forecast for the Philippines while slightly downgrading its outlook for Southeast Asia on the back of weaker global demand for manufactured exports.

In its latest Asian Development Outlook, the ADB said economic growth forecasts for the country are maintained at 6.0 percent in 2023 and 6.2 percent in 2024, noting that robust investment and private consumption drove growth in the first quarter of the year.

The Philippine economy expanded by 6.4 percent in the first 3 months of 2023, buoyed by construction, manufacturing, financial and insurance activities.

In 2022, the Philippine economy grew faster than anticipated at 7.6 percent. The government expects GDP to grow between 6 to 7 percent this year.

To meet the 6 to 7 percent target, the economy must grow 5.9 to 7.2 percent in the next 3 quarters, National Economic and Development Authority Secretary Arsenio Balisacan said previously.

Asian Development Bank Country Director Pavit Ramachandran said the Philippines can achieve high economic growth in the coming years.

“I think the infrastructure push, which ADB has been supporting strongly with the Philippines government committing 5,6 percent of their GDP on infrastructure, we see that as a very very positive development, with its multiplier effects across the board,” he said.

The expert noted, however, that the Philippines still needs to make more progress in terms of making growth more inclusive.

“There’s still some ways to go in terms of human development, social development progress, particularly around lagging labor productivity, some of the inequalities on health--social development in particular when you compare Philippines with its peers.”

“So really if you’re looking at enhancing inclusive development, financing development, green development, there’s still, it’s an evolving pathway.”

Ramachandran also called on the Philippine government to enhance productivity in the agricultural sector.

“I think the big area we need to keep an eye on is the food and agriculture sector. Because we are seeing some continued challenges around supply side issues, inflationary pressures have abated somewhat but there needs to be enhanced productivity across the board there,” he added.

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Inflation forecasts for 2023 and 2024 are maintained for Malaysia, Singapore, Thailand, and the Philippines, according to the multilateral lender.

Meanwhile, the GDP outlook for Southeast Asia was slightly downgraded from 4.7 percent to 4.6 percent in 2023 and from 5.0 percent to 4.9 percent in 2024.

“Weaker global demand for manufactured exports has slowed growth even as domestic demand remained intact,” the ADB said.

Exports from developing Asia also weakened in the first quarter of 2023 as global demand slowed, the lender noted.

But consumption and investment are expected to boost aggregate regional growth to 4.8 percent in 2023, as earlier forecast, with the projection for 2024 revised down only marginally to 4.7 percent.