ADB sees Philippines to sustain high economic growth in medium term

April 11, 2018

The Asian Development Bank (ADB) sees the Philippines to sustain its high growth rate for this year and in 2019, with the expected implementation of large infrastructure projects.

In its new Asian Development Outlook 2018, the Manila-based lending agency said on Wednesday  Philippine gross domestic product could hit 6.8 percent in 2018 and 6.9 percent next year, higher than the 6.7 percent growth in 2017.

"Again the story is about sustained economic growth. Last year 6.7 percent, this year we are projecting 6.8 percent, 2019, 6.9 (percent). Essentially sustained and very high economic growth," Kelly Bird, ADB country director for the Philippines, said in a press conference in Mandaluyong City.

He said the projected high GDP growth was not surprising, citing domestic demand and public and business sectors infrastructure spending would drive the economic expansion.

"This is of course related to the government's Build, Build, Build infrastructure program," he said, adding that this would "help drive investment."

With high economic growth, he said this would push inflation.

Bird said inflation could hit 4 percent in 2018, the high end projection of the the Bangko Sentral ng Pilipinas, as global oil and food prices rise, and higher taxes on some commodities due to the recently passed tax reform measure take effect.

In 2019, he said inflation is expected to marginally decline to 3.9 percent.

But Bird said the external risks to the outlook would be heightened volatility in international financial markets or a revival of protectionist trade policies around the world.

"However, a strong external payments position appears to make the Philippines resilient under any foreseeable external shock," the ADO report said. Celerina Monte/DMS