21 Jul 2022
The Philippine economy is set to grow faster than first forecast in 2022, as Covid measures are eased, the vaccination program is expanded and due to an investment and household consumption rally.
The findings were included in a report published on Thursday by the Asian Development Bank (ADB).
The Asian Development Outlook (ADO) 2022 Supplement shows the economy will grow by at least 6.5% this year, a rise from the bank’s 6% forecast in April. The 2023 growth prediction remains at 6.3%, reports the Philippine News Agency.
However, downside growth risks in the second half of this year could stem from a steeper-than-forecast slowdown in key industrial economies, likely elevated global commodity prices and tighter financial conditions.
“The Philippine economy’s growth momentum has accelerated close to its ideal growth path,” according to 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.”
Increased Covid vaccine coverage and a comparatively mild impact from the Omicron variant permitted the government to ease restrictions from Q1. This fuelled a rise in operations within the majority of private businesses, with the unemployment rate declining to near pre-pandemic levels.
The unemployment rate stood at 6% in May, a fall from 7.7% the year before.
Moreover, inflation is set to increase to 4.9% in 2022 and 4.3% in 2023, amid higher global commodity prices. This is a rise from the bank’s April forecast of 4.2% this year and 3.5% in 2023.
In addition, the government is predicted to continue public spending on priority infrastructure projects within the so-called “Build, Build, Build” scheme. The Malolos-Clark Railway Project and South Commuter Railway Project are just two of the projects receiving ADB financing, part of the North–South Commuter Railway System.