14 Dec 2021
The Philippines growth forecast was upgraded on Tuesday by the Asian Development Bank (ADB) following the economy’s “impressive resilience” during the impact of the Delta variant of Covid.
As part of its “Asia Development Outlook” report, the bank now forecasts the Philippines to grow 5.1% this year, following its previous growth prediction of 4.5%.
Should this level of growth be reached, it would exceed the government’s growth target of 4-5% for this year. The bank forecasts GDP growth of 6% in 2022, higher than the prior forecast of 5.5%.
Within Southeast Asia, where average growth of 3% is forecast for 2021, just the Philippines, Singapore and Thailand had upwardly revised growth outlooks after their GDP “surprised on the upside” in Q3. However, growth in the Philippines would be slower than the broader developing Asia with 46 economies, with 7% growth forecast this year, from the previous projection of 7.1%.
ADB’s report stated: “Consumer and business confidence improved steadily in Q4 2021 on acceleration in the government’s vaccination program, a sharp drop in new COVID-19 cases, and further reopening of the economy. Growth forecasts are therefore raised substantially.”
GDP in the Philippines grew 7.1% on-year in Q3, despite new lockdowns. This growth led the year-to-date figure to 4.9%, bolstering government hopes it would reach, or surpass, the high-end of the 2021 target.
“The Philippine economy has shown impressive resilience,” Kelly Bird, country director at ADB, said.
“Public spending on infrastructure and continued vaccination of the population will help the country further accelerate its recovery in 2022,” Bird added.
The Asian Development Bank is the latest institution to adopt a bullish outlook on the Philippines. Last week the World Bank upgraded its growth outlook on forecasts that certain factors such as employment and the digital transition were addressed by the national government.