The Philippine economy will grow better than its neighboring countries this year due to a rise in job opportunities for Filipinos, increased production and sales by businesses, and a notable surge in construction activities, the Asian Development Bank (ADB) said.
Photo Insert: The ADB's forecast for the Philippines surpasses both the 4.8% growth projection for developing Asia and the 4.6% projection for the Southeast Asian region.
Based on the ADB’s Asian Development Outlook (ADO) report recently released, the local economy, as measured by the gross domestic product (GDP), is projected to grow by 6.0 percent in 2023, the highest among countries in East and Southeast Asia.
However, this growth rate, if realized, is a notable slowdown compared to the 7.6 percent expansion recorded in 2022.
In the latest ADO report, the Philippines' GDP forecast was kept unchanged from the previous projection given in April. However, other Southeast Asian economies were downgraded, particularly Vietnam, which previously held the top position in the region.
Vietnam's GDP growth projection has been revised downward from 6.5 percent to 5.8 percent. It is now followed by Indonesia at 4.8 percent, Malaysia at 4.7 percent, Thailand at 3.5 percent, and Singapore at 1.5 percent.
In addition, the Philippines is also poised to surpass economies in East Asia, with China's GDP projected to grow by only 5.0 percent, followed by Hong Kong at 4.7 percent, Taiwan at 1.5 percent, and South Korea at 1.3 percent.
The ADB's forecast for the Philippines surpasses both the 4.8% growth projection for developing Asia and the 4.6% projection for the Southeast Asian region.
It attributed the strong growth forecast to increased investment and consumer spending, which are backed by more employment opportunities, higher production and retail sales, and ongoing private and public construction projects.
Furthermore, ADB noted that the Philippine tourism industry made a comeback this year along with the sustained growth in the business process outsourcing and information services sectors.
The growth outlook for this year by ADB, however, aligns with the lower end of the government's target range of six percent to seven percent.
For 2024, the ADB maintained its growth projection for the Philippines at 6.2 percent, which is slightly lower than the target set by President Marcos of 6.5 percent to eight percent.
Meanwhile, the ADB maintained its inflation forecast for the Philippines at 6.2 percent for the current year and 4.0 percent for 2024.
If these forecasts materialize, this year's inflation would surpass the government's projected range of five percent to six percent and indicate a faster rate than last year's 5.8 percent.
Lastly, ADB's inflation forecast for next year aligns with the upper end of the government's expectations, where consumer prices are projected to stabilize within the target band of two percent to four percent.