The Philippine economy is now expected to grow by 7.4 percent in 2022, faster than what was expected in September in contrast with the anticipation of a “global gloom” as the Asian Development Bank (ADB) updated its outlook for developing economies in the region.
The ADB’s update of its flagship report Asian Development Outlook 2022 puts the Philippines in harmony with Southeast Asia’s general trajectory and dissonance with emerging Asia’s growth path.
The multilateral lender said it raised its forecast on Philippine growth based on stronger-than-expected domestic demand, which was spurred by rising employment and a recovery in tourism after the country lifted COVID-19 mobility restrictions.
Last September, the ADB penciled in only 6.5 percent for Philippine full-year growth.
The update placed growth in the Philippines at the high end of the range as compared with those of its Southeast Asian neighbors.
As a block, Southeast Asia is now expected to grow by 5.5 percent, faster than the 5.1 percent forecast in September.
Vietnam is tipped to lead the region at 7.5-percent growth this year. Thailand’s growth is expected at 3.2 percent, still better than the previous forecast of 2.9 percent
“The Philippine economy has shown strong underlying growth momentum and resilience in 2022 and this is expected to continue in 2023, with GDP (gross domestic product) growth converging towards its longer term growth rate of about 6 percent,” said Kelly Bird, ADB’s country director for the Philippines.
And yet, the ADB lowered its growth forecast for the Philippines in 2023 to 6 percent from 6.3. percent previously.
Again, this was in accord with the 2023 forecast for Southeast Asia, now 4.7 percent from 5 percent.
In contrast, developing Asia—excluding China—is now cued to grow by 4.2 percent from 4.3 percent in the September forecast,
ADB chief economist Albert Park said Asia and the Pacific will continue to recover, but worsening global conditions mean that the region’s momentum is losing some steam as we head into the new year.
“There are downside risks to [Philippine] growth in 2023, including inflation stickiness, further increases in interest rates, and a sharper than expected slowdown in GDP growth in advanced countries,” Bird said.
At the Kapihan sa Manila Bay news forum on Wednesday, Budget Secretary Amenah Pangandaman expressed confidence that the government’s growth target for 2023, ranging from 6 percent to 7 percent, will be achieved in spite of external headwinds.
Pangandaman said that while the government lowered the growth target range for next year from 6.5 percent to 8 percent, “the overall goal to steer the economy back to a high-growth trajectory as encapsulated in the Medium-term Fiscal Framework will nevertheless still be achieved with the consolidated efforts of the national government to open up the economy and promote growth across sectors.”