ADB upbeat on PH
The Asian Development Bank (ADB) expects the Philippines to sustain robust economic growth in the near term as it reaps the benefits of a demographic sweet spot and gains from a manufacturing resurgence.
“I am encouraged by the recent strong performance of the Philippine economy. It grew 6.8 percent last year, higher than we expected and among the highest in Asia. This reflected increased public infrastructure investment and higher private investment and consumption,” ADB president Takehiko Nakao said in a speech during the Manila-based multilateral lender’s 50th anniversary reception on Tuesday.
Nakao said he believed the country would continue to enjoy solid growth this year and beyond, “based on a young and educated work force and strong private sector activities including business process outsourcing and manufacturing.”
Official data showed that in 2016, manufacturing as measured by the Volume of Production Index jumped 14.4 percent, faster than the 2.5-percent growth in 2015.
The BPO industry, meanwhile, remains a major dollar earner for the country. It is seen to exceed cash remittance flows from overseas Filipinos in the coming years. Last year, the BPO sector’s revenue was estimated to be equivalent to 10 percent of the gross domestic product.
In December, the ADB jacked up its 2017 GDP growth forecast for the Philippines to 6.4 percent from 6.2 percent. The government targets a 6.5-to 7.5-percent economic expansion this year.
“In 2017, domestic demand will continue to underpin economic growth. This outlook assumes that investments will continue to expand on efforts to upgrade public infrastructure and improve the business environment,” the ADB said in its December 2016 Asian Development Outlook Supplement report.
Nakao said the ADB was “strongly committed to supporting the 10-point socioeconomic agenda set out by the Duterte administration.” The agenda aims to slash poverty incidence to 14 percent by 2022 from 21.6 percent in 2015.
Also, the ADB “will work closely with the administration to help accelerate infrastructure investment; reform the tax system; improve the ease of doing business; promote rural development and value chains; upgrade health and education; and strengthen social protection,” Nakao said.
Priority, he said, would be given to supporting peace and development in Mindanao via road infrastructure rehabilitation, the promotion of small and medium enterprises and local government capacity building.
The ADB has so far extended $16 billion in loans and grants to the Philippine government, and $1 billion in loans and equity investment to private firms in the country, Nakao said. These are on top of a $100-million worth of technical assistance.