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Friday, March 29, 2024

ADB raises PH growth in 2022 to 7.4% from 6.5% in Sept.

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The Asian Development Bank (ADB) raised its growth forecast for the Philippines this year to 7.4 percent from 6.5 percent made in September, considering the strong 7.7-percent expansion in the first three quarters as the economy remained resilient despite the global headwinds and the lingering pandemic.

The latest projection was contained in the Asian Development Outlook Supplement report for December 2022.

The 2022 projection for the Philippines was the second highest in the Southeast Asian region next to Vietnam’s 7.5 percent from 6.5 percent.

Next year, however, ADB lowered the projection for the Philippines to 6 percent from the previous estimate of 6.3 percent last September 2022 on a “gloomy global outlook.”

“Growth in major advanced economies is expected to slow considerably in 2023,” ADB said.

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Despite the reduction in GDP growth forecast, the 6-percent for the Philippines next year is the second highest next to Vietnam’s 6.3 percent.

The Philippine economy expanded by 7.6 percent in the third quarter this year, faster than the 7 percent a year ago, bringing the average in the first three quarters to 7.7 percent. The last time the economy grew by 7.7 percent in the first three quarters was in 2010.

“The Philippine economy has shown strong underlying growth momentum and resilience in 2022 and this is expected to continue in 2023, with GDP growth converging towards its longer-term growth rate of about 6 percent,” said ADB Philippines country director Kelly Bird.

“There are downside risks to growth in 2023, including inflation stickiness, further increases in interest rates, and a sharper than expected slowdown in GDP growth in advanced countries,” Bird said.

Growth in the Philippines will be at the high end of the range as compared with those of its Southeast Asian neighbors. The 2022 growth forecast for the region was raised to 5.5 percent from the previous 5.1 percent despite the overall dimmed outlook for Asia and the Pacific, according to the report.

GDP growth in Southeast Asia is expected to slow to 4.7 percent in 2023.

The ADB said upward pressures on commodity prices, including oil which will weigh heavily on the predominantly oil-importing Philippines, are expected to be sustained in 2023 with continued uncertainty arising from the Russian invasion of Ukraine.

Inflation is expected to quicken to 5.7 percent this year from the previous forecast of 5.3 percent before slowing in 2023, with the forecast for next year maintained at 4.3 percent.

The government has said that it expects to continue to invest on its flagship infrastructure projects to spur employment and lay the foundations for a more vibrant and resilient economy.

The ADB is helping finance some of these priority projects, such as the Malolos Clark Railway Project and South Commuter Railway Project, both part of the North–South Commuter Railway System that aims to provide a safe, fast, and efficient transportation link between Metro Manila and northern and southern Luzon provinces.

In Metro Manila, ADB is financing the EDSA Greenways Project, which aims to improve and modernize the pedestrian experience along the main EDSA thoroughfare and the Metro Manila Bridges Project, which seeks to help solve traffic congestion in the metropolis especially in eastern Manila.

Meanwhile, Budget Secretary Amenah F. Pangandaman said she is confident that the government will reach the 6.0 to 7.0 GDP growth target set by the Development Budget Coordination Committee (DBCC) for 2023 despite external headwinds.

At the “Kapihan sa Manila Bay” media forum Pangandaman said that while the DBCC slightly lowered the growth target range for next year, the overall goal to steer the economy back to a high-growth trajectory as encapsulated in the Medium-term Fiscal Framework will nevertheless still be achieved with the consolidated efforts of the national government to open the economy and promote growth across sectors.

Among these efforts is the strengthening of the domestic economy amid the lingering effects of the pandemic and geopolitical tensions. This will be backed up with the implementation of government strategies and interventions under the Philippine Development Plan 2023-2028, as well as public investments in priority programs across different sectors that boosts growth, especially in the agricultural and MSME sectors.

She also mentioned the efforts of the current administration in securing investments to fund development programs, in line with President Ferdinand R. Marcos Jr.’s pronouncement that the Philippines must become an investment destination.

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