MANILA – The Asian Development Bank slightly reduced its economic growth forecast for the Philippines to 6.2 this year. However, it maintained the growth forecast for 2020 at 6.4 percent noting that the country somehow still remains among one of the top economies in Southeast Asia.
The Asian Development Outlook Supplement report released Thursday cited the government underspending resulting from delayed passage of the national budget that moderated economic growth to 5.6 percent in the first quarter.
The report said public construction contracted while growth in government consumption eased in January to March period.
Growth in exports of goods and services also slowed as a result of lackluster global trade and economic activity and the downturn in the electronics cycle. These effects were partly offset by higher household consumption and private investment, it said.
“Public investment is expected to rebound in the second half of 2019 following budget approval in April and to pick up next year as more infrastructure projects come on-stream. Slowing inflation, low unemployment, and steady remittances will continue to support household consumption,” it added.
The multilateral lender earlier projected a gross domestic product (GDP) growth of 6.4 percent for this year.
The ADB also revised its inflation forecast for the Philippines from 3.8 percent to 3 percent this year, considering lower food prices.
Inflation in the country slowed down to 2.7 percent in June 2019, averaging 3.4 percent in the first half.
Rice prices have declined on improved supply since the lifting of quantitative restrictions on rice imports in February 2019.
“The inflation forecast for 2020 is maintained at 3.5 percent with an expected pickup in global commodity prices,” the ADB added. (PNA)