The Asian Development Bank on Thursday raised its 2022 growth projection for the Philippines to 6.5 percent from the previous estimate of 6 percent amid the reopening of the economy and the expansion of the government COVID-19 vaccination program.
The revised forecast was contained in the Asian Development Outlook 2022 Supplement released by the Bank.
It said the Philippine economy would grow faster than initially expected in 2022, “following the relaxation of COVID-19 mobility restrictions in the country, the expansion of the COVID-19 vaccination program and a rebound in investment and household consumption”.
The multilateral lender said the Philippine economy would grow by at least 6.5 percent in 2022, up from the bank’s April forecast of 6.0 percent. The growth projection for 2023 remained at 6.3 percent.
“The Philippine economy’s growth momentum has accelerated close to its ideal growth path,” ADB Philippines country director Kelly Bird said.
“Strong domestic demand supported by a pick-up in employment and remittance inflows, private investment expansion, and large public infrastructure projects will underpin the country’s recovery from the economic impact of the pandemic,” Bird said.
The bank said downside risks to growth in the second half might come from sharper-than-expected slowdowns in major industrial economies, possible sustained elevated global commodity prices and tighter financial conditions.
It said the wider COVID-19 vaccination coverage, with adolescents among those getting inoculated, and relatively mild health impacts from the Omicron variant allowed the government to relax restrictions starting in the first quarter of the year.
This in turn spurred resumption in expanded operations for most private businesses, with the unemployment rate falling to near pre-pandemic levels. The unemployment rate was at 6.0 percent in May, down from 7.7 percent a year earlier.
Inflation is forecast to quicken to 4.9 percent and 4.3 percent in 2022 and 2023, respectively, on the back of higher global commodity prices. These are up from ADB’s April forecast of 4.2 percent in 2022 and 3.5 percent for 2023.
The ADB said it expects the government to sustain public spending on priority infrastructure projects under the “Build, Build, Build” program. Among the projects receiving ADB financing are the Malolos-Clark Railway Project and South Commuter Railway Project, both part of the North–South Commuter Railway System that will provide safe, fast and efficient transportation to link Metro Manila to northern and southern Luzon provinces.
It is also financing the EDSA Greenways Project to improve the pedestrian experience along the main EDSA thoroughfare in the capital and the Metro Manila Bridges Project to help resolve traffic congestion in the metropolis.