The Asian Development Bank kept its economic growth forecast for the Philippines this year and next on the back of robust investment and private consumption.
The Manila-based multilateral lender said in its Asian Development Outlook July Update the Philippine economy, as measured by the gross domestic product, would likely grow by 6 percent in 2023 and 6.2 percent in 2024.
Its 2023 growth forecast for the Philippines is the fastest among major Southeast Asian economies. The ADB sees Vietnam growing 5.8 percent; Indonesia, 4.8 percent; Malaysia, 4.7 percent; Thailand, 3.7 percent and Singapore, 1.5 percent in 2023.
The ADB also expects the Philippines to expand 6.2 percent in 2024, the same assumption for Vietnam.
Meanwhile, First Metro Investment Corp., the investment banking arm of the Metrobank Group, is banking on robust consumer and infrastructure spending to help the economy grow by 6.1 percent this year.
FMIC president Jose Patricio Dumlao said in a virtual press briefing Wednesday that despite the persistent global uncertainty and volatility, the economy would remain resilient because of its strong fundamentals.
“Amid a challenging global environment, the Philippine economy has demonstrated remarkable resilience. In the first quarter of this year, we achieved robust growth of 6.4 percent, outperforming our peers in the region. This is a testament to the strength of the country’s macroeconomic fundamentals,” Dumlao said.
“We continue to be optimistic, and we believe that the GDP will expand by 6.1 percent this year, as we expect strong domestic demand to remain a key driver of growth. This positive momentum will be supported by prudent fiscal management, heightened infrastructure spending, and enhanced business and consumer confidence,” he said.
UA&P economist Victor Abola, who also presented his macroeconomic outlook, said the Philippines would likely be “insulated by the negative developments overseas primarily due to easing inflation rate, strong consumer spending aggressive infrastructure spending and strengthening of the peso against the dollar.”
“There is a lot of room for optimism. The clouds are less dark in Philippines. We tend to be a bit more unplugged to the movements in US and global economy,” Abola said.
ADB also maintained its growth outlook for developing economies in Asia and the Pacific at 4.8 percent this year, as robust domestic demand continues to support the region’s recovery. However, it downgraded Southeast Asia’s growth prospects from 4.7 percent to 4.6 percent in 2023 and from 5.0 percent to 4.9 percent in 2024, reflecting weaker global demand for manufactured exports.
Inflation in developing Asia is forecast at 3.6 percent this year, compared with an April estimate of 4.2 percent. It raised the inflation outlook for 2024 to 3.4 percent from an earlier estimate of 3.3 percent.
It kept its inflation forecast for the Philippines at 6.2 percent in 2023 and 4.0 percent in 2014.
“Asia and the Pacific continues to recover from the pandemic at a steady pace,” said ADB chief economist Albert Park.
“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,” he said.