ADB sees Philippines posting fastest growth in Southeast Asia  

MANILA, Philippines — The Asian Development Bank (ADB) has kept its economic growth forecasts for the Philippines for this year and next year, but expects the country to have the highest growth rate in Southeast Asia.

In its Asian Development Outlook report for December released yesterday, the multilateral lender said it expects the economy to grow by 5.7 percent this year, unchanged from the gross domestic product (GDP) growth forecast it provided last September.

If this is realized, the Philippines will be the fastest growing economy in Southeast Asia this year as the multilateral lender has lower forecasts for other countries in the region, such as Vietnam at 5.2 percent, Indonesia at five percent, Malaysia at 4.2 percent, Thailand at 2.5 percent, and Singapore at one percent.

The ADB’s 2023 economic growth forecast for the Philippines, however, is lower than the government’s six to seven percent growth target for this year.

For next year, the ADB also retained its growth forecast for the Philippines at 6.2 percent.

This forecast places the Philippines ahead of its peers in the region as ADB is projecting Vietnam will grow by six percent, Indonesia by five percent, Malaysia by 4.6 percent, Thailand by 3.3 percent, and Singapore by 2.5 percent next year.

ADB’s 2024 GDP growth forecast for the Philippines is within the 6.5 to eight percent growth goal set by the government for next year.

“The economy continues to be supported by domestic demand,” the ADB said.

The economy grew by 5.9 percent in the third quarter, bringing the average growth for the January to September period to 5.5 percent.

“This momentum is expected to continue, despite tighter financial conditions,” the ADB said.

It said higher public investment, rising consumer spending, especially on hotels or restaurants and tourism activities amid a strong recovery of international tourism across Southeast Asia, will lift growth in the Philippines.

The ADB expects infrastructure projects that are underway to support growth.

It also cited the more upbeat business outlook for 2024 on expectations of buoyant domestic demand based on the central bank’s third quarter survey.

In terms of the inflation outlook, the ADB also maintained its forecasts for the Philippines at 6.2 percent for this year and four percent for next year.

Headline inflation in the country eased to a 20-month low of 4.1 percent in November from 4.9 percent in October, driven mainly by slower food price upticks.

This brought average inflation in the January to November period to 6.2 percent, still higher than the Bangko Sentral ng Pilipinas’ two to four percent target range.

While inflation across developing Asia continues to decline, ADB chief economist Albert Park said risks remain from elevated global interest rates and climate events such as El Niño.

“Governments in Asia and the Pacific need to remain vigilant to ensure that their economies are resilient, and that growth is sustainable,” he said.