MANILA - The Asian Development Bank lowered Wednesday its economic growth outlook for the Philippines as the gross domestic product (GDP) growth "softened unexpectedly" in the first half of the year.
In an update of its Asian Development Outlook (ADO) 2018 report, the ADB revised its Philippine growth forecast to 6.4 percent from 6.8 percent for 2018 and 6.7 percent from 6.9 percent in 2019 reflecting moderation in agriculture output, exports, weakening peso and high inflation rate.
However, the ADB said growth could pick up by 2019 as inflationary pressures taper off due to tighter monetary policies.
“The Philippines’ growth outlook remains stable despite moderating slightly in the first half of the year, as the country’s economic fundamentals are strong,” said ADB country director for the Philippines Kelly Bird.
“We’re expecting growth to slowly pick up as public investment in infrastructure and social sectors accelerate and key economic sectors continue to perform solidly.”
The Bangko Sentral ng Pilipinas (BSP) has raised interest rates by a total of 100 basis points since May in a bid to tame down rising prices.
Analysts polled by Reuters expect the BSP to raise interest rates during a Monetary Policy meeting on Thursday, Sept. 27.
Meanwhile, developing economies in Asia could grow slower than expected due to the escalating trade tensions that could "test the region's resilience," the updated ADB report said.
-- with a report by Reuters and Warren De Guzman, ABS-CBN News