The Asian Development Bank (ADB) maintained its growth forecasts for the Philippines despite the resurgence of coronavirus infections in Southeast Asia that also posed a threat in the local economy.
In its Asian Development Outlook Supplement released Tuesday, July 20, the ADB said it is keeping its gross domestic product (GDP) projections for the country at 4.5 percent in 2021 and 5.5 percent next year.
ADB said the bank’s growth forecasts released in April are still “aligned” with its latest outlook despite the country’s 4.2 percent GDP contraction in the first three months of the year.
According to the Manila-based multilateral institution, sustained government spending on infrastructure and social assistance programs have supported the nation’s economic recovery.
It also noted a gradual pickup in household spending aided by strong overseas Filipino remittances.
While private investment remained sluggish in the country, ADB noted that indicators such as purchasing managers’ index, industrial production, and imports have gradually improved.
“The government’s vaccination effort has accelerated to over 250,000 jabs daily, improving the prospects that community protection in metropolitan Manila could be achieved by year end,” ADB said.
While the economic outlook for the Philippines was unchanged, ADB’s GDP projections were slower compared with the government’s targets.
The Duterte administration is targeting 6.0 percent to 7.0 percent growth this year and 7.0 percent to 9.0 percent in 2022.
Along with the GDP projections, ADB also maintained its inflation forecasts for the Philippines at 4.1 percent in 2021 and 3.5 percent in 2022.
It said the government’s temporary measures to augment food supply including reducing tariffs on rice and meat imports and allowing more pork imports under low-tariff minimum access volume terms would help control inflation.
In the first semester of the year, the country’s inflation rate averaged at 4.4 percent, above the government’s target of 2.0 percent to 4.0 percent.
Meanwhile, ADB revised its 2021 regional economic outlook for Southeast Asia from 4.4 percent to 4.0 percent owing to reimposition of mobility restrictions to combat a COVID-19 resurgence across the region.
GDP forecasts were downgraded for Indonesia, Laos, Malaysia, Thailand, Timor-Leste, and Vietnam, but raised its growth projection for Singapore.
Like the Philippines, ADB’s 2021 growth forecast for Brunei, Cambodia, and Myanmar were unchanged.