The Asian Development Bank (ADB) has revised its growth forecast for the Philippines upwards this year.
It, however, sees slower growth for 2023.
According to the latest supplement to the Asian Development Outlook 2022, the Philippine economy will grow 7.4 percent in 2022, up from the bank’s September forecast of 6.5 percent. Gross domestic product (GDP) growth for 2023 is expected to slow to six percent from the previous forecast of 6.3 percent.
“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 six percent,” Kelly Bird, ADB Philippines country director, said.
“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.
The ADB 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.
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, the ADB said.
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.
Meanwhile, Bird said in a press conference yesterday ADB’s indicative lending program to the Philippines for 2023 to 2025 is $4.3 billion annually, up from the $2.9 billion allocated every year from 2019 to 2022.
Bird said the average annual lending reflects continuity and increased focus on climate change and food security.
Some of the projects to be covered by the indicative lending program include the Bataan-Cavite Interlink Bridge, Laguna Lakeshore Expressway, Metro Rail Transit-4 (Ortigas to Taytay), Davao Public Transport Modernization Project, Integrated Flood Resilience and Adaptation Project Phase 1, Mindanao Irrigation Project, Post Covid Business and Employment Program, Competitive and Inclusive Agriculture Development Program and the Climate Change Action Program.
