The Asian Development Bank (ADB) has kept its growth forecasts for the Philippines, while it expects inflation to ease this year and next.
In its Asian Development Outlook (ADO) September 2024 report, ADB maintained its growth outlook for the Philippine economy at six percent for 2024 and 6.2 percent in 2025.
The report said the expansion is underpinned by broad-based domestic demand supported by a moderation in inflation and monetary easing, while sustained public investment, with its high multipliers, continues to lift growth.
The multilateral agency lowered its inflation forecast to 3.6 percent this year from its April estimate of 3.8 percent reflecting the sustained deceleration in food prices partly due to lower tariffs on rice imports.
Inflation is seen to ease further to 3.2 percent in 2025 compared to the previous estimate of 3.4 percent.
“Most of the ingredients for the Philippines’ sustained economic growth are in place–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,” said ADB Philippines country director Pavit Ramachandran.
“With inflation slowing, the country is in a strong position to lead growth in Southeast Asia,” Ramachandran added.
However, the Manila-based agency said risks remain from potential severe weather events which could drive inflation higher.
External factors such as a sharper slowdown in major advanced economies and the People’s Republic of China, financial volatility due to US monetary policy decisions, geopolitical tensions and rising global commodity prices also pose threats to growth, the report said.
