THE PHILIPPINES and the rest of Southeast Asia are expected to sustain their growth momentum through 2013 and continue to serve as global growth drivers.
In its latest report, Asian Development Bank said that the Philippines and its neighbors may likely perform well next year even as the global economy remains weak.
“The surging economies of Southeast Asia have been a bright spot in developing Asia’s otherwise subdued 2012 growth performance, but the broader region should still pick up steam in 2013,” ADB said.
The Philippine economy grew by a surprising 7.1 percent in the third quarter, registering the fastest growth rate in Southeast Asia and defying the global trend. This was due to the increase in government spending and robust household consumption that is supported by remittances from overseas-based Filipinos.
As a result, ADB adjusted its average growth forecast for the Asean 5—the Philippines, Indonesia, Malaysia, Thailand, and Singapore—in 2012 from 5.6 to 5.9 percent.
ADB said favorable developments on the domestic front would help the Philippines and the rest of Southeast Asia fend off the ill effects of the crisis in the euro zone and the fiscal problem of the United States.
ADB’s 2013 outlook of a favorable growth performance for the Philippines, together with its neighbors in Southeast Asia, is consistent with the government’s forecast that the domestic economy may grow between 6 and 7 percent.
The development institution said the Philippines’ healthy economic growth rate, as well as that of some Southeast Asian countries, will also help offset the drag caused by the slowdown of the Indian economy.
Nonetheless, ADB said, the euro zone crisis and the fiscal problems of the United States cannot be totally ignored.
“Enduring debt problems and economic weakness in Europe and the looming fiscal cliff in the United States remain very real threats to developing Asia next year,” ADB Chief Economist Changyong Rhee said in a statement.
The United States and the euro zone are two of the biggest export markets for the Philippines and other developing Asian countries.
Philippine economic officials said that, as part of their growth strategy for the country, the government would continue to increase public spending, especially on infrastructure and social services, to counter the ill effects of anemic export earnings.
Government economic officials also said sustained increase in remittances, rising tourism revenues, additional investments in the services sector, and potential foreign investments in the mining sector will help strengthen the domestic economy.