ADB says Phl growth to stay above 6%

MANILA, Philippines - The Asian Development Bank (ADB) has maintained a cautious growth outlook for the Philippines at 6.4 percent this year and 6.3 percent in 2016.

ADB country director for the Philippines Richard Bolt said the 2016 outlook is slightly lower than this year due to external uncertainties such as the economies of Japan and the US.

“The 2016 outlook reflects investors’ cautiousness amid uncertainties due to the elections,” Bolt said in a press briefing yesterday. Business and investments generally take a wait-and-see attitude towards national elections.

Philippine gross domestic product (GDP) expanded 6.1 percent in 2014, marking several consecutive years of over six percent growth.

The ADB official said that inflation is forecast at a lower 2.8 percent this year, before rising to 3.3 percent in 2016.

Bolt said most of the positive drivers of growth last year would remain major factors this year.

“Factors that powered private consumption in 2014, such as growth in employment, modest inflation, and higher inflow of remittance, are expected to support solid growth this year,” he added.

Growth is projected to accelerate this year on buoyant private consumption, a solid outlook for investment and exports, and recovery in government pending.

However, the ADB said the Philippines need to stimulate investment an generate more and better jobs.

“Even when the employment rate fell to 6.6 percent in January 2015, the lowest in 10 years, 2.6 million people remained jobless, half of them aged 15 to 25 years, and a further 6.5 million were under-employed,” the ADB said in its Asian Development Outlook 2015.

The Philippines is one of the weakest in drawing foreign direct investment (FDI) among Asean nations.

As a percentage of GDP, the Philippines reflected FDIs reaching just a little over two percent last year from over one percent average between 2009 and 2013.

FDI inflows to Thailand and Malaysia accounts for a little over three percent of GDP each, while Indonesia boosts of FDI inflows of 2.5 percent of GDP.