ADB upgrades 2022 economic growth forecast for Philippines to 6.5%

The Asian Development Bank (ADB) has upgraded its growth projection for the Philippine economy, taking into consideration the easing of pandemic restrictions and the government’s vaccination program.

Citing its Asian Development Outlook 2022 Supplement, the multilateral lender said the country’s economy as measured by gross domestic product (GDP) —the total value of goods and services produced in a country in a specific period— will grow by 6.5% in 2022.

The ADB’s latest projection is an upgrade from the 6% growth it forecasted in April, when it released its flagship publication, the Asian Development Outlook.

The bank’s upgraded outlook is also within the Marcos administration’s 6.5% to 7.5% growth target for this year.

So far, the Philippines opened the year with a faster-than-expected economic growth of 8.3%, which compares with the 7.8% in the fourth quarter and the -3.8% the first quarter of 2021.

The Philippine economy is forecast to 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 ADB said in a statement on Thursday.

For 2023, the bank maintained its growth projection at 6.3%.

However, it said that downside risks to growth in the second half of 2022 may come from sharper-than-expected slowdowns in major industrial economies, possible sustained elevated global commodity prices, and tighter financial conditions.

“The Philippine economy’s growth momentum has accelerated close to its ideal growth path,” said ADB Philippines country director Kelly Bird.

“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,” said Bird.

The ADB noted that the wider COVID-19 vaccination coverage, with adolescents among those getting inoculated, and relatively mild health impacts from the Omicron variant have allowed the government to relax restrictions starting in the first quarter of the year.

This in turn spurred a resumption in expanded operations for most private businesses, with the unemployment rate falling to near pre-pandemic levels, it added, noting that unemployment rate was at 6% in May 2022, down from 7.7% a year earlier.

Inflation is forecasted to quicken to 4.9% and 4.3% in 2022 and 2023, respectively, on the back of higher global commodity prices, up from ADB’s April forecast of 4.2% in 2022 and 3.5% for 2023.—AOL, GMA News