AMRO cuts 2020 Philippine growth outlook to 6.5%

CEBU, Philippines — The ASEAN+3 Macroeconomic Research Office (AMRO) has projected the Philippine economy to further slow down in 2020, this after it also downgraded the country’s growth outlook for this year. 

Citing weakness in the region’s manufacturing sector, AMRO announced on Tuesday in a report from GMA News Online that it now sees the Philippine economy to manage a 6.5% growth in 2020, which is lower than the 6.6% forecast made earlier.

This is for the July Monthly Update of ASEAN+3 Regional Economic Outlook, which also revealed that a slower-than-expected gross domestic product (GDP) in the first quarter prompted AMRO to downgrade Philippine forecast for 2019.

“AMRO staff had revised baseline forecasts downward, following continued weakness in manufacturing and export outturns,” the report reads.

The report said “the outlook for the manufacturing sector in the ASEAN+3 region, particularly the Plus3 economies, is lackluster, underpinned by the uncertainties surrounding global trade”.

The output slowdown and the dip in new orders were reflected by a contraction in China’s headline purchasing managers' index (PMI) at 49.4, amid continuing uncertainties surrounding the tensions with the United States.

PMI is a composite indicator of the manufacturing sector’s performance, with 50.0 as the threshold. A reading above 50 indicates growth, and a reading below 50 indicates a contraction.

AMRO added that “Globally, the average number of economies with PMIs above 50 less those below 50 moved into negative in June 2019.”

“The PMI reading for the ASEAN+3 region remains positive but has shrunk considerably. Going forward, the re-escalation in trade tensions remains a key near-term risk for manufacturing and growth in the region,” it added.

The Asian Development Bank (ADB) likewise trimmed last week its Philippine growth forecast for 2019, citing the reenacted budget as drawback. — JOB