ADB maintains Philippines growth outlook
MANILA, Philippines — The Asian Development Bank kept its growth forecast on the Philippines as its prospects continued to be buoyed by resilient consumer spending.
In its flagship Asian Development Outlook released Wednesday, the multilateral lender maintained the Philippine economy would grow 6.0% this year and 6.2% in 2024
The outlook was unchanged since the previous April report, as the ADB noted “robust investment and private consumption” generated rosy growth figures in the first quarter. The Philippine economy grew at a slower clip of 6.4% year-on-year in the January-March period.
The projection fell at the lower end of the Marcos Jr. administration’s gross domestic product growth target of 6-7% in 2023.
If realized, ADB’s projection would make the Philippines the fastest-growing economy across Southeast Asia in 2023, outpacing Singapore and Vietnam. The domestic economy expanded 7.6% in 2022 on the back of resilient consumer spending.
That said, the Manila-based lender also turned its sights on the tourism and business process outsourcing sectors, which have been proven reliable drivers of growth for the Philippine economy. The Bangko Sentral ng Pilipinas is eyeing tourism receipts to expand 80% this year, while the BPO sector is expected to tally 9% growth.
Zooming out, the ADB revised its growth projections on Southeast Asia. The new outlook pegged the region would expand at a slower 4.6% in 2023, and 4.9% in 2024, as global demand for manufactured exports was retreating.
The growth story across Southeast Asia focused on the world’s waning appetite for exports, as inflation has impacted the prospects of even advanced economies. The Euro area found itself in a technical recession earlier this year, as price growth and expensive borrowing costs dampened consumption across that area.
That said, China’s reopening proved to be a bright spot for Asia, the ADB noted. The world’s second-largest economy managed to pull the region’s growth prospects up, but could still unravel in the coming months.
“Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened,” said ADB Chief Economist Albert Park. — Ramon Royandoyan
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