ADB retains Philippines growth forecast for 2019, 2020

MANILA, Philippines — The Asian Development Bank (ADB) has retained its 2019 and 2020 growth forecasts for the Philippines at six percent and 6.2 percent, respectively, even as it downgrades growth expectations for Developing Asia.

In a supplement to its Asian Development Outlook 2019 released in September, the multilateral bank said growth could be expected to accelerate in the fourth quarter of the year throughout 2020, supported by investments as more infrastructure investments come on stream.

Accommodative fiscal and monetary policies will also support domestic demand.

Economic output in the country picked up to 6.2 percent in the third quarter, bringing the growth average for the first three quarters to 5.8 percent.

The pickup was supported by a rebound in government expenditure following the belated enforcement of the 2019 national budget.

ADB’s growth expectation for the Philippines this year is still in line with the downgraded growth forecast of six to 6.5 percent set by the Development Budget Coordinating Committee (DBCC) yesterday. This was previously set at six to seven percent.

Growth forecasts for Developing Asia, meanwhile, was slashed as growth in China and India is weighed down by external and domestic factors.

ADB now expects gross domestic product in the region to expand by 5.2 percent both in 2019 and 2020, down from the September forecast of 5.4 percent and 5.5 percent, respectively.

Growth in China is now expected at 6.1 percent in 2019 and 5.8 percent in 2020, downgraded from 6.2 and six percent, respectively.  This is attributable to trade tensions and a slowdown in global activity coupled with weaker domestic demand.

“While growth rates are still solid in Developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook. Domestic investment is also weakening in many countries, as business sentiment has declined,” said ADB chief economist Yasuyuki Sawada.

“Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly.”