Philippine economic recovery is “firmly on track” and is expected to speed up following further relaxation of mobility restrictions and continued policy support, the ASEAN+3 Macroeconomic Research Office (AMRO) said.
The regional macroeconomic surveillance organization said on Friday, March 11, that the country’s economy, as measured by gross domestic product (GDP), is expected to recover “robustly” by 6.5 percent in both 2022 and 2023.
AMRO’s 2022 forecast is quicker than its 6.2 percent GDP projection released last Jan. 5. However, this below the seven percent to nine percent target of the Development Budget Coordination Committee.
Siu Fung Yiu, AMRO lead economist, said the country can still grow by above six percent this year despite the recurrent waves of COVID-19 infections in the later part of last year up to early January.
“Continued fiscal support and a high vaccination rate will help keep the economy relatively open and sustain the recovery momentum,” Yiu said.
For 2022, AMRO said public expenditure will continue to be the main driver of growth, with private sector recovery gaining momentum with the reopening of the economy.
In addition, better economic prospects, improving confidence, and favorable external demand are also boosting growth, AMRO noted.
Meanwhile, AMRO expects inflation declining to 3.7 percent this year and 3.3 percent in 2023, from the high 3.9 percent recorded in 2021.
“However, a further spike up in global oil prices due to geopolitical conflicts poses upside risk to the inflation outlook in 2022,” AMRO said.
For this year and next, the government has an inflation target of 2.0 percent to 4.0 percent.
AMRO’s preliminary assessments of the Philippine economy comes after its virtual annual consultation with the authorities from Feb. 18 to March 8.
The consultation focused on the development of the COVID-19 pandemic and the country’s vaccination progress, the status of economic recovery, key risks and challenges, and policy responses.