ADB: PH to post the highest growth in ASEAN

Philippines to lead ASEAN in growth – ADB

Story by Louella Desiderio 

18 July 2024

MANILA, Philippines — The Philippine economy is expected to post the fastest growth in Southeast Asia this year and next, according to the Asian Development Bank (ADB). The Asian Development Outlook July report released yesterday showed that the multilateral lender has retained its growth outlook for the Philippines for this year and 2025. 

In particular, the ADB expects the Philippines’ gross domestic product (GDP) growth for this year at six percent, unchanged from the forecast it provided last April.

This forecast is at the low end of the government’s six to seven percent economic growth goal for the year.

ADB’s GDP growth forecast for the Philippines, if realized, will make the country the fastest growing economy along with Vietnam in Southeast Asia.

The ADB expects lower GDP growth rates in other countries in the region such as Indonesia (five percent), Malaysia (4.5 percent), Thailand (2.6 percent) and Singapore (2.4 percent).

The ADB also kept its economic growth forecast for the Philippines at 6.2 percent for 2025.

This forecast is lower than the government’s 6.5 to 7.5 percent GDP growth target for next year.

Based on its projections, the ADB expects the Philippines and Vietnam to have the highest economic growth rates in Southeast Asia next year.

Philippine GDP growth was at 5.7 percent in the first quarter of the year, slower than the 6.4 percent expansion in the same period last year, but faster than the 5.5 percent growth in the fourth quarter of last year.

The country’s first quarter economic growth was supported by domestic demand, along with a recovery in merchandise exports.

ADB’s report also showed inflation forecasts for the Philippines were untouched at 3.8 percent this year and 3.4 percent next year, both within the central bank’s two to four percent target range.

Inflation in June eased to 3.7 percent, snapping four months of acceleration amid slower upticks in energy and transport costs.

From January to June, inflation averaged 3.5 percent, within the two to four percent target of the Bangko Sentral ng Pilipinas (BSP).

“Moderating inflation and expected monetary easing in the second half of 2024 will support household consumption and investment,” the ADB said.

In contrast to the ADB’s optimistic view, the Association of Southeast Asian Nations Plus 3 (ASEAN+3) Macroeconomic Research Office (AMRO) trimmed its growth outlook for the Philippines for this year and in 2025.

AMRO’s Quarterly Update of the ASEAN+3 Regional Economic Outlook report released on Monday showed that the Philippine economy is expected to post 6.1 percent growth this year, down from the previous forecast of 6.3 percent.

The revised 2024 GDP forecast for the Philippines, however, is within the government’s six to seven percent economic growth target for the year.

AMRO chief economist Hoe Ee Khor said in an online briefing that the economic growth forecast for the Philippines was shaved in light of recent data.

For 2025, AMRO also cut its economic growth forecast for the Philippines to 6.3 percent from 6.5 percent previously.

This new forecast is below the 6.5 to 7.5 percent growth goal set by the government for next year.

Khor said AMRO also trimmed the growth forecasts for many of the countries in the region as the recovery in the external sector is turning out to be weaker than expected.