By Lee C. Chipongian
The Asian Development Bank (ADB) said there is room for a higher growth outlook for the Philippine economy due to increasing investments in the manufacturing and technology sectors.
Currently, the Manila-headquartered ADB projects 6.8 percent domestic GDP growth for this year from 6.7 percent in 2017, and 6.9 percent in 2019.
ADB Director General for Southeast Asia, Ramesh Subramaniam, noted the rising manufacturing and other investments in the country. This translates to labor productivity growth to build up capacity.
“This means, there’s even further room for the Philippine economy to grow,” he said in one of the media briefings during the 51st ADB Annual Meeting, which the Philippines is hosting.
As the fastest growing economy in the region with 75 straight quarters of growth, Subramaniam said ADB sees no evidence or material risk of overheating for the local economy yet. He said increased investments are sufficiently meeting robust domestic demand, thus helping keep inflation relatively manageable.
The Duterte government expects a seven to eight percent growth outlook over the medium term and to slash poverty by about a third to only 14 percent by 2022. Growth drivers include rising private-sector investments, government infrastructure spending, and household consumption.
ADB has been one of the Philippines’ major development partners for over 50 years, serving as among the biggest sources of official development assistance.
Subramaniam said the ADB is keen on adapting to the changing financing needs of member economies, including those that are reaching higher income levels like the Philippines.
ADB has earlier expressed support to the Philippines’ most ambitious infrastructure program to date. Under the “Build, Build, Build” program, the government will spend about $160 billion on vital public infrastructure all over the country.
This will be financed by a mixture of tax revenues and borrowings, including ODA, which offers interest rates much lower than commercial rates.
Among the recently announced infrastructure financing from the ADB is a $380-million loan that will help improve 280 kilometers of national roads and bridges in Mindanao. The project is expected to expand access to social services and economic opportunities, more so in poorest regions in the South.