The Asian Development Bank said Wednesday it reduced the 2019 growth forecast for the Philippines to 6.4 percent from the previous estimate of 6.7 percent following the lower-than-expected gross domestic product growth of 6.2 percent in 2018.
The multilateral lender said, however, the Philippine economy was expected to outperform most of its neighbors in the Asia-Pacific region.
Data showed the 6.4-percent growth forecast for the Philippines this year would exceed China’s 6.3 percent, Korea’s 2.5 percent, Taiwan’s 2.2 percent, Indonesia’s 5.2 percent, Malaysia’s 4.5 percent, Singapore’s 2.6 percent and Thailand’s 3.9 percent.
Only three countries in the region are expected to grow faster than the Philippines this year. These are Vietnam (6.8 percent), Bangladesh (8 percent) and India (7.2 percent).
The 6.4-percent growth forecast for the Philippines in 2020 would also surpass that of China (6.1 percent), Korea (2.5 percent), Taiwan (2 percent), Indonesia (5.3 percent), Malaysia (4.7 percent), Singapore (2.6 percent) and Thailand (3.7 percent).
Vietnam is expected to grow faster next year at 6.7 percent, as well as Bangladesh (8 percent) and India (7.3 percent).
ADB Philippines country manager Kelly Bird said in a recent forum the growth forecast for the Philippines this year might be lowered because of external and domestic factors such as the global economic slowdown and lower GDP expansion last year.
The 6.2-percent growth last year missed the official target range of 6.5 percent to 7.5 percent, pulled down by faster inflation and sluggish contribution of the agricultural sector to the economy.
Inflation peaked at a nine-year high of 6.7 percent in September and October but eased to 6 percent in November and 5.1 percent in December after the immediate measures implemented by the state to curb excessive prices of goods and services took effect.
ADB chief economist Yasuyuki Sawada said during the presentation of the Asian Development Outlook 2019 that the growth of the Southeast Asian region would moderate this year to 4.9 percent from 5.1 percent last year, before picking up to 5 percent in 2020.
“Global economic slowdown will impact the growth of domestic economies. But domestic consumption will support the growth of Asia-Pacific economies,” Sawada said.
Sawada said among the short-term risks to growth in the region would be the prolonged US-China trade war, possible rapid interest rates hikes by the Federal Reserve and the further slowdown in developing economies.
Sawada said that for the medium term, the main risk could be the natural disasters that might hit countries in the region. He said it would be very important for most economies to build disaster resilience to sustain economic growth.
The World Bank also adjusted its growth forecast for the Philippines this year to 6.4 percent from the previous estimate of 6.5 percent, taking into account the impact of the delay in the national budget approval, slowdown in global trade and the El Niño dry spell.
The World Bank also reduced its growth forecast for 2020 to 6.5 percent from 6.6 percent. For 2021, the economy is seen to grow by 6.5 percent. These projections were contained in the latest Philippines Economic Update released by the bank Monday.
