MANILA - The Asian Development Bank (ADB) has again lowered its growth outlook for the Philippines for 2019 amid a slowdown in the global economy, as well as slower growth in domestic investment following the delay in the passage of the 2019 budget.
ADB now sees the Philippines growing 6 percent this year, down from its 6.2 percent outlook in July and 6.4 percent in April.
"The downward revision in growth comes from the slowdown in domestic investment in the first half of 2019 mainly caused by the delayed passage of the 2019 national budget, which held back public expenditure, particularly on infrastructure," ADB said in a statement.
The lender, however, expects the Philippines to recover its growth momentum as the government fast-tracks spending.
“Public spending should regain traction for the rest of 2019, with the government committed to catching up with its spending plans, especially as new and larger infrastructure projects get underway,” said Kelly Bird, ADB Country Director for the Philippines.
ADB also sees Philippine growth as 'resilient' when compared to the rest of Asia. The lender noted that investor sentiment in the Philippines remains broadly positive, based on a pickup in business confidence seen in the most recent surveys by the Bangko Sentral ng Pilipinas.
Bird said the recovery in public spending should boost domestic consumption, which is currently well supported by steady overseas workers’ remittances, low unemployment, and moderate inflation.
ADB sees Philippine inflation slowing to 2.6 percent this year, before picking up to 3 percent in 2020. These are lower compared to previous forecasts, ADB said, thanks to improved domestic rice supply following the lifting of quantitative restrictions on rice.
The lender meanwhile said the outlook for Philippine exports remains weak in light of slower-than-expected growth in the country's major trade partners.
Escalating trade tensions between the United States and China have also darkened the outlook for developing Asia, which includes the Philippines, ADB said.
"The People's Republic of China-US trade conflict could well persist into 2020, while major global economies may struggle even more than we currently anticipate," Yasuyuki Sawada, ADB's chief economist, said in a statement.
Along with weakening trade momentum, the Manila-based lender also sees declining investment as a major risk to the region's growth prospects.
- With reports from Warren De Guzman, ABS-CBN News and Reuters