ADB says 'strong rebound' to support PH economic growth of 6.5 percent in 2022

ABS-CBN News

Posted at Sep 21 2022 10:49 AM

MANILA — Strong rebound from the COVID-19 pandemic will support the Philippine economy's projected growth of 6.5 percent in 2022 despite surging inflation, the Asian Development Bank said on Wednesday.

The economic growth forecast was retained at the same 6.5 percent level in July despite the recent increase in prices driven mostly by global pressures such as the war between Russia and Ukraine, and local supply chain challenges, according to Asian Development Outlook (ADO) 2022 Update report. 

For 2023, the growth projection was also kept at 6.3 percent, the Manila-based multilateral lender said. 

The ADB noted the bouncing back of travel, recreation, dining and household consumption in the first half of 2022 as mobility restrictions further eased.

It said most sectors, such as services, have contributed to the recovery of employment. 

Unemployment declined to 5.2 percent in July, which means less people are jobless. However, government data also showed more workers were underemployed.

Growth is also likely to benefit from public spending as the government has committed to continue infrastructure projects. 

“The normalization of socioeconomic activity will usher the Philippine economy to a steady, pre-pandemic pace of expansion,” said ADB Philippines Country Director Kelly Bird. 

“The recovery in tourism and private investments, coupled with sustained public spending on large infrastructure projects and remittances from overseas Filipinos, will bolster the country’s economic recovery this year," Bird added.

The Development Budget Coordination Committee (DBCC) has revised its growth projection for 2022 twice. The government expects the gross domestic product (GDP) to grow between 6.5 percent and 7.5 percent this year. 

But several downside risks to growth were also flagged by the ADB, including the slowdown in advanced economies, global political tensions, and possible elevated commodity prices due to the impact of Russia's invasion of Ukraine.

Meanwhile, inflation is expected to quicken faster to an average of 5.3 percent in 2022, higher than its July forecast of 4.9 percent. This is way above the government target of 2 to 4 percent. The ADB cited global energy shocks and natural disasters for the upward revision.

During last August's monetary-policy setting meeting, the Bangko Sentral ng Pilipinas raised its inflation forecast to 5.4 percent this year before easing in 2023 and 2024. 

The ADB is supporting several flagship projects of the government, including the Malolos Clark Railway Project and South Commuter Railway Project, as well as the EDSA Greenways Project, among others.

RELATED VIDEO:

Watch more News on iWantTFC