ADB sticks to robust growth outlook for Philippines

MANILA, Philippines — The Philippine economy is set to grow at an even faster clip in the years ahead on the back of rising manufacturing and other investments, a top official of the Asian Development Bank (ADB) said.

ADB director general for Southeast Asia Ramesh Subramaniam said rising labor productivity and investments in manufacturing as well as technology are building up the economy’s productive capacity.

“This means, there’s even further room for the Philippine economy to grow,” Subramaniam said in a media briefing during the 51st ADB annual meeting.

He said the ADB does not see any material risk of overheating for the Philippines, even as it has become one of the fastest growing economies in Asia in recent years.

Rising investments are sufficiently meeting robust domestic demand, thus helping keep inflation relatively manageable.

The multilateral lender sees the gross domestic product (GDP) of the Philippines growing by 6.8 percent this year and 6.9 in 2019 from 6.7 percent a year ago.

The government expects the Philippines to hit upper middle income status by 2019 and to slash poverty by about a third to only 14 percent by 2022.

Growth drivers include rising private-sector investments, government infrastructure spending, and household consumption.

He pointed out the ADB is keen on adapting to the changing financing needs of member economies, including those that are reaching higher income levels like the Philippines.

ADB earlier expressed support to the Philippines’ most ambitious infrastructure program to date.

The Duterte administration has allocated about P8.4 trillion to bankroll crucial infrastucture projects until 2022 under the Build Build Build program.

Funding will come from a mixture of tax revenues and borrowings, including official development assistance (ODA) funds that offer interest rates much lower than commercial rates.

Among the recently announced infrastructure financing from the ADB is a $380 million loan that will help improve 280 kilometers of national roads and bridges in Mindanao.

The project is expected to expand access to social services and economic opportunities particularly in the poorest regions in the South.