The Asian Development Bank (ADB) on Wednesday lowered its inflation forecast for the Philippines but maintained its 6 percent growth outlook for the country this year.
The ADB, in its Asian Development Outlook (ADO) September 2024 report, also kept the 6.2-percent gross domestic product growth forecast for the Philippines in 2025.
It said easing inflation and interest rates, along with sustained public spending on infrastructure projects, would support Philippine economic growth.
The bank revised its inflation forecast to 3.6 percent in 2024 from its April estimate of 3.8 percent, reflecting the continued decline in food prices, partly due to lower tariffs on rice imports. Inflation is expected to ease further to 3.2 percent in 2025.
“Most of the ingredients for the Philippines’ sustained economic growth are in place,” said ADB Philippines country director Pavit Ramachandran. “Rising government revenues are boosting public expenditures on infrastructure and social services, increasing employment is driving consumption, and reforms to open the economy to more investments are underway.”
The ADB, however, warned that risks remain, including potential severe weather events, a sharper slowdown in major advanced economies and China, financial volatility due to US monetary policy decisions, geopolitical tensions and rising global commodity prices.
The Philippine government expects public infrastructure spending to range between 5 percent and 6 percent of GDP annually from 2024 to 2028. The government’s “Build Better More” infrastructure program includes 66 ongoing projects and another 31 approved for implementation as of August 2024.
ADB is financing key infrastructure projects, such as the Malolos Clark Railway Project and the South Commuter Railway Project, as well as the Bataan-Cavite Interlink Bridge Project and the Integrated Flood Resilience and Adaptation Project.
