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MANILA – The Asian Development Bank (ADB) on Wednesday maintained its 2023 Philippine economic growth projection, forecasting the country as the fastest-growing economy in Southeast Asia this year.
In its ADB Outlook July Update, the bank said the country's gross domestic product (GDP) will likely grow by 6.0 percent this year, the highest among major Southeast Asian countries.
The ADB expects Indonesia to grow by 4.8 percent, Malaysia by 4.7 percent, Singapore by 1.5 percent, Thailand by 3.5 percent, and Vietnam by 5.8 percent.
ADB's projection also falls within the lower end of the government's 6 to 7 percent economic growth target for this year.
The Philippine economy grew by 6.4 percent in the first quarter of the year.
"Robust investment and private consumption drove growth by 6.4 percent year on year in Q1 (first quarter) 2023, supported by rising employment, expanding production and retail sales, and brisk private and public construction," the ADB said.
"Tourism bounced back, and growth remained strong for business process outsourcing and information services.”
For 2024, the ADB sees the Philippine economy to grow by 6.2 percent.
ADB country director for the Philippines Pavit Ramachandran told the Philippine News Agency (PNA) that domestic investment and household consumption will continue to be key drivers of growth.
"Private consumption will be buoyed by rising employment and steady remittances from overseas Filipino workers. Expansion in public infrastructure spending with large infrastructure projects underway continues to lift investment," he said.
Ramachandran said growth in services is also expected to remain robust.
"Private consumption will underpin retail trade, while the rebound in tourism is benefitting a range of services, most notably hotels and restaurants, transport, and communication. The growth in business process outsourcing and information services also remains strong," he added.
Ramachandran cited the need to strengthen the economic recovery by further lifting investment in infrastructure and human capital development, along with building community resilience to climate change impacts and protecting the environment.
Meanwhile, inflation is expected to settle at 6.2 percent this year and fall to 4 percent in 2024.
The growth outlook for Southeast Asia as a whole, meanwhile, was downgraded from 4.7 percent to 4.6 percent in 2023 and from 5.0 percent to 4.9 percent in 2024.
"Weaker global demand for manufactured exports has slowed growth even as domestic demand remained intact," the ADB said.
It said private consumption continued to be the primary driver of economic growth in the first half of 2023, buoyed by improved labor market conditions and income across Southeast Asia. (PNA)
