ADB upgrades Philippine growth outlook

MANILA, Philippines — The Asian Development Bank (ADB) has raised its growth forecast for the Philippines to 6.7 percent this year and 6.8 percent in 2018, citing strong household consumption, manageable inflation and infrastructure investment.

In a supplement to the Asian Development Outlook (ADO) 2017, the multilateral development bank said this year’s growth outlook for the country was raised from an earlier forecast of 6.5 percent made in September and from 6.7 percent for next year.

ADB said the domestic economy grew an average of 6.7 percent in the first three quarters of the year, fuelled by accelerating investment and robust consumption. With this growth pace, the government is confident the economy is on track to meeting the full-year target range of 6.5 percent to 7.5 percent this year.

“The government is on track to achieve its target of spending 5.3 percent of GDP on public infrastructure this year. Meanwhile, household consumption remained strong despite moderating slightly from last year,” the ADB said.

The bank said the recovery of exports in the first nine months of the year as well as the strong contribution of services and manufacturing to the economy also factored into the higher growth forecast.

“This outlook assumes that growth in the government’s infrastructure program will accelerate, supported by improvements in budget execution, with more large investment projects underway,” it said in the report.

Growth projections in Southeast Asia—the country’s immediate neighborhood—was likewise raised to 5.2 percent this year from five percent in September and 5.2 percent in 2018 from the previous projection of 5.1 percent.

ADB said the subregion is benefitting from stronger investments and exports with growth emanating from Brunei, Malaysia, Philippines, Singapore and Thailand.

“Infrastructure investment continued to play an important role in Indonesia, the Philippines and Thailand. Robust domestic demand—particularly private consumption and investment—will continue to support growth in the subregion,” said the report.

ADB likewise hiked its growth projections for developing asia this year to six percent from 5.9 percent in September but retained its growth forecast of 5.9 percent for 2018.

“Developing Asia’s growth momentum, supported by recovering exports, demonstrates that openess to trade remains an essential component of inclusive economic development,” said Yasuyuki Sawada, ADB’s chief economist. “Countries can further take advantage of the global recovery by investing in human capital and physical infrastructure that will help sustain growth over the long-term.”