ADB raises Philippine economic growth forecast to 6.5 percent in 2022

Jessica Fenol, ABS-CBN News

Posted at Jul 21 2022 08:48 AM | Updated as of Jul 21 2022 02:04 PM

MANILA - The Philippine economy is likely to grow faster than anticipated in 2022, the Asian Development Bank said as it revised its outlook for the year.

The economy could expand by as much as 6.5 percent from its initial forecast of 6 percent in April, according to the Asian Development Outlook 2022 Supplement released Thursday.

Growth will be fueled by the relaxed COVID-19 mobility restrictions, expansion of the vaccination program, rebound in investment as well as household consumption, the Manila-based lender said in a statement.

The ADB also cited the continued improvement in unemployment, which is down to 6 percent from 7.7 percent in the beginning of the year.

“The Philippine economy’s growth momentum has accelerated close to its ideal growth path,” said ADB Philippines Country Director Kelly Bird. 

“Strong domestic demand supported by a pick-up in employment and remittance inflows, private investment expansion, and large public infrastructure projects will underpin the country’s recovery from the economic impact of the pandemic," he added.

The gross domestic product (GDP) grew 8.3 percent in the first quarter.

But the ADB noted that downside risk in the second half include the slowdowns in major industrial economies, possible sustained elevated global commodity prices and tighter financial conditions.

For 2023, growth projection was kept at 6.3 percent.

ADB's outlook meets the lower end of the Development Budget Coordination Committee's (DBCC) revised and lower growth target of between 6.5 percent to 7.5 percent.

For inflation, the bank said it is expected to quicken to 4.9 percent in 2022 from April's forecast of 4.2 percent and 4.3 percent in 2023 from 3.5 percent.

Inflation in June accelerated to 6.1 percent due to rising oil and other commodity prices.