The Asian Development Bank (ADB) remains optimistic about the Philippine economy’s growth this year, as it sees no serious concerns so far that would lead to significant changes to its projection for the country.
“We actually are quite optimistic about the Philippines. The growth outturn in the first half of the year has provided us with much optimism, and also given the policy consistency that we have seen emerging between finance, central bank in terms of what needs to be done to address the immediate priorities, but also looking at social protection and in terms of what monetary policy measures that need to be put in place, we are seeing very strong coordination emerging,” Ramesh Subramaniam, ADB director general for Southeast Asia, said in a virtual briefing yesterday.
“We do not have any particular concerns. At this stage, we are not looking at any significant changes to the outlook projections that we just released last week. We will obviously be continuously monitoring this, but again, I’ll underline that we do not see any serious concerns. We are in fact, actually, on the contrary, quite optimistic, I would say,” Subramaniam said in the online event which is part of the ADB’s 55th Annual Meeting.
Just last week, the ADB reported that it maintained its growth forecast for the Philippines this year and next, while inflation is expected to quicken for 2022.
The ADB said in its recent report a strong rebound in domestic demand with the easing of COVID-19 mobility restrictions in the country will support robust growth for the Philippine economy in 2022, despite higher inflation due to global and local price pressures.
The Philippines’ gross domestic product is seen to grow by 6.5 percent in 2022, the same as forecast in July but up from the bank’s April forecast of 6 percent, according to the Asian Development Outlook (ADO) 2022 Update.
The growth projection for 2023 is also kept at 6.3 percent, as monetary policy tightening and accelerating inflation both crimp domestic demand, the bank said.
Meanwhile, inflation is expected to quicken to 5.3 percent in 2022, up from the July forecast of 4.9 percent and 4.2 percent in the April ADO 2022 report, underpinned by sharp upward shocks to global energy and commodity prices, the multilateral agency said.
Asked about the impact of the recent super typhoon on inflation, amid the damage to the agriculture sector, Subramaniam said: “We are monitoring this quite closely, the impact of the most recent typhoon, (but) we still don’t have the data. But we do not have any specific concerns with regard to inflation being driven up in the Philippines. Clearly, policy stance, policy measures that the government and the central bank have… certainly would be focused on managing inflation and bringing it down.”
“The domestic demand increase and particularly the pent-up demand from the COVID-19 times clearly would have an impact in terms of pushing up (inflationary) pressures but that again, the financial market developments would play a leveling or a neutralizing impact.
But having said that, we do not have any specific concerns as to inflation going up,” he added.
