MANILA, Philippines -- The Asian Development Bank (ADB) lowered its growth forecast for the Philippines to 6 percent this year.
In its Asian Development Outlook 2014 Update, the ADB said it downgraded its 2014 gross domestic product (GDP) growth forecast for the Philippines by 0.2 percentage points, after growth in the first nine months of the year only reached 5.8 percent.
The ADB forecast is lower than the government's 6.5 to 7.5 percent target for 2014.
"After GDP in the Philippines rose by 6.1 percent in the first half, the growth pace fell back to 5.3 percent in the third quarter. Robust private consumption and higher private investment and net exports were insufficient to balance unexpectedly weak public spending," it noted.
For 2015, the ADB maintained its Philippine growth forecast at 6.5 percent.
"Continued strong household consumption bolstered by steady growth in remittances and increases in domestic employment will, along with improved government spending, support a pickup in growth next year and the Update’s growth forecast of 6.4 percent for 2015," the ADB said.
Aside from the Philippines, the ADB also slightly reduced projections for Indonesia, Singapore and Thailand, due to softer growth in the third quarter.
For Southeast Asia, the ADB also reduced the 2014 GDP forecast to 4.4 percent, from an earlier forecast of 4.6 percent. For 2015, the region is expected to expand by 5.1 percent, down from an earlier forecast of 5.3 percent.
The ADB said the growth outlook for developing Asia remains steady, with the aggregate GDP expected to grow by 6.1 percent in 2014, slightly lower than the 6.2 percent earlier forecast. The region is projected to expand by 6.2 percent in 2015, 0.2 percent points lower than an earlier forecast.
However, the recent decline in oil prices is expected to benefit Asia.
"While growth in the first three quarters of this year were somewhat softer than we had expected, declining oil prices may mean an upside surprise in 2015 as most economies are oil importers," ADB Chief Economist Shang-Jin Wei said.
As oil and commodity prices continue to fall, many developing Asian economies have revised their inflation forecasts downward. The ADB lowered its inflation forecast for the region to 3.2 percent in 2014 from an earlier forecast of 3.4 percent; and 3.5 percent in 2015 from an earlier forecast of 3.7 percent.
"Falling global oil prices present a golden opportunity for importers like Indonesia and India to reform their costly fuel subsidy programs. On the other hand, oil exporters can seize the opportunity to develop their manufacturing sectors as low commodity prices tend to make their real exchange rates more competitive," Wei said.