ADB: Philippine GDP to ease at 6% this year before rebounding in 2016

MANILA, Philippines - The Philippine economy is poised for its slowest growth in four years this year before recovering in 2016, the Asian Development Bank (ADB) said Tuesday.

Economic growth - as measured by gross domestic product (GDP) - is seen to expand 6 percent this year, the slowest since 3.7 percent posted in 2011. The bank said the exports and agriculture slump fail to be offset by a pick-up in state spending.

Last year, GDP expanded by 6.1 percent.

The forecast, contained in the update to the ADB's Asian Development Outlook, was down from March's 6.4 percent. For 2016, growth projection of 6.3 percent was retained.

As of the first semester, GDP growth slowed to 5.3 percent. 

"All in all, growth will remains favorable. We assess that economic expansion will continue and will accelerate on the second half of the year," ADB Country Director Richard Bolt said in a briefing.

The 2015 forecast was trimmed after exports and manufacturing slowed in the first half. Bolt said "below-target" state spending was also to blame, although this is already accelerating.

Moving forward, growth could come from "robust" private investment activity and consumption, which is "supported by new jobs created."

Local spending could also get a boost from the upcoming 2016 elections as the government frontloads disbursements.

"Recently enacted reforms to improve competitiveness and to attract investment will play a key role in the future growth as will continued reforms and investments in infrastructure and other public goods," Bolt said.

Aside from growth, the ADB also sees consumer prices to increase slowly this year. Inflation could hit 2.3 percent in 2015, down from March's 2.6-percent forecast.

For 2016, inflation could trend at a higher 3 percent. The government has set a 2- to 4-percent target for this year.