The Manila-based Asian Development Bank (ADB) has raised its economic growth outlook for the Philippines due to improving coronavirus (COVID-19) situation and the acceleration in the government’s inoculation program.
Based on the supplement to the Asian Development Outlook (ADO) 2021 on Tuesday, Dec. 14, the multilateral institution is now forecasting that the country’s gross domestic product (GDP) may expand by 5.1 percent this year.
The new economic growth estimate is better than ADB’s earlier projection of 4.5 percent released in September.
Moreover, the ADB also elevated its 2022 GDP forecast to six percent from 5.5 percent.
Kelly Bird, ADB Philippines country director said the local economy has shown impressive resilience, noting that growth momentum as clearly picked up on the back of vigorous drive to vaccinate Filipinos against the COVID-19 virus.
“Public spending on infrastructure and continued vaccination of the population will help the country further accelerate its recovery in 2022,” Bird said.
Vaccination has allowed the economy to slowly reopen, boosting consumer and business confidence.
More than 57 million Filipinos, or nearly 65 percent of the target for vaccination, had received at least one COVID-19 vaccine dose as of Dec. 8, 2021.
In addition to the government’s purchases of vaccines, the World Health Organization-supported COVID-19 Vaccines Global Access (COVAX) facility also donated supply for the country’s nationwide vaccination program.
In addition, ADB said public spending on major infrastructure projects will support the country’s economic growth.
ADB has been supporting the government’s “Build, Build, Build” infrastructure development program, which seeks to boost investments on roads, bridges, and railways to fuel faster growth, especially in areas outside the capital Metro Manila.
Meanwhile, the bank is expecting a faster rate of increase in consumer prices.
For 2021 and 2022, inflation outlook is at 4.4 percent and 3.7 percent, respectively, mainly due to rising fuel prices.
These are up from ADB’s September forecast of 4.1 percent this year and 3.5 percent next year.