Japan think tank sees rosy picture for PH GDP, but risks for all of Asean-4

Japan Center for Economic Research (JCER) | INQUIRER.net stock photo

MANILA, Philippines—A slowing Chinese economy and the stringent “zero COVID-19” policy on the mainland risk economic recovery in Asean-4, although the think tank Japan Center for Economic Research (JCER) kept its 2022 growth forecast for the Philippines at 7.1 percent—the highest in the region.

“The year-on-year growth rate of Asean-4’s real gross domestic product (GDP) increased from 4.4 percent in the fourth quarter of 2021 to 4.9 percent in the first quarter of 2022 due to firm private consumption. Private consumption is expected to remain robust as people’s mobility improves with the relaxation of COVID-19-related restrictions in and after the second quarter,” JCER said in a report on Tuesday (June 14). Besides the Philippines, Indonesia, Malaysia and Thailand belonged to JCER’s Asean-4 grouping.

In the case of the Philippines, JCER projected 2022 GDP growth to be within the government’s narrower 7 to 8 percent target range.

JCER’s 2022 growth forecast for the Philippines was higher than its projections of 5.4 percent for Malaysia, 4.7 percent for Indonesia, and 3.5 percent for Thailand.

Following the stronger-than-expected first-quarter expansion of 8.3 percent, JCER expects the second-quarter GDP to grow 8.7 percent; the third quarter by 6.9 percent; and the fourth quarter by 4.8 percent on waning low-base effects.

JCER also expects the Philippine economy to grow quarter-on-quarter during all four quarters of 2022, indicating continuous recovery amid dismantling of pandemic restrictions.

However, JCER tempered its 2023 GDP growth expectations for the Philippines to 5.1 percent from 5.9 percent previously, below the government’s 6 to 7 percent target.

One of the reasons cited by President Rodrigo Duterte’s economic managers when they downscaled this year’s growth goal from the more ambitious, wider 7 to 9 percent range was China’s slowdown, given that it’s among the Philippines top trade-in-goods partners.

JCER warned that across Asean-4, “exports will fall in the second quarter of 2022, and their recovery will be modest in the third quarter.”

“In these quarters, [Asean-4’s] exports will receive downward pressures from China’s economic slowdown and distortions in international trade and specialization, both of which will be caused by China’s restrictive measures against COVID-19,” JCER said.

JCER downgraded its 2022 GDP growth forecast for China to 5 percent from 5.4 percent previously, further below last year’s actual 8.1-percent expansion, partly due to “harsh lockdown measures implemented in major cities in response to the spread of COVID-19.”

While Asean-4’s growth this year would likely outpace last year’s 3.5 percent, JCER’s updated forecast of 4.9-percent regional GDP expansion for 2022 was lower than its previous expectations of 5.6 percent.

TSB