AMRO raises Philippine GDP forecast

MANILA, Philippines — The ASEAN+3 Macroeconomic Research Office (AMRO) now expects the Philippines to post the highest growth in ASEAN+3, citing the continued opening of the country’s economy and the government’s continued push for infrastructure development.

In a briefing yesterday, AMRO chief economist Hoe Ee Khor said the Philippines is expected to post a 6.9 percent gross domestic product (GDP) growth this year, higher than the 6.5 percent estimate in April, but slightly lower than the government’s seven to eight percent target.

“We are slightly less optimistic than government. But nevertheless, a 6.9 percent growth rate is among the highest rate in the region,” Khor said.

The only other country seen by AMRO to post above six percent GDP growth in ASEAN+3 this year is Vietnam at 6.3 percent.

While the Philippines was hit hard by the pandemic, with the economy contracting by 9.6 percent in 2020, Khor said the country saw a strong rebound last year as it grew 5.7 percent.

“The driver for this growth is the opening of the economy. The infection was very well contained. The cases were averaging in the low hundreds,” he said.

While COVID-19 infections are now increasing, Khor said given the increased vaccinations, AMRO expects the Philippine economy to remain open and economic activity to continue.

He said domestic demand and continued implementation of the Build Build Build program for infrastructure development would fuel the country’s economic growth.

Khor said the business process outsourcing sector is likely to continue to expand and contribute to the country’s economic performance.

For next year, AMRO has maintained its 6.5 percent forecast for Philippine economic growth.

For the ASEAN+3 region, AMRO trimmed its GDP growth projection for this year to 4.3 percent from 4.7 percent previously, given the impact of the recent COVID-19 outbreak in China as well as challenges brought by the war in Ukraine.

Meanwhile, AMRO adjusted its GDP growth forecast for ASEAN+3 for next year to 4.9 percent from 4.6 percent earlier.

With the conflict between Russia and Ukraine exacerbating global supply chain woes and pushing up the prices of fuel and food, inflation has been rising across the ASEAN+3.

For the Philippines, AMRO raised its inflation projection for this year to 4.4 percent from 4.1 percent.

As for next year, AMRO expects the country’s inflation rate to hit 3.8 percent, up from an earlier forecast of 3.5 percent.

Last year, the country’s average inflation rate was at 3.9 percent.

For the ASEAN+3 region, AMRO hiked its 2022 inflation projection to 5.2 percent from 3.5 percent.

It also adjusted its inflation forecast for ASEAN+3 next year to a higher 2.8 percent from 2.3 percent, previously.

AMRO expects elevated prices of fertilizer and feedstock to continue to push up food prices this year and in 2023.