An employee counts U.S. dollar bills before changing it to Philippine Pesos inside a money changer in Manila September 19, 2013. The Philippine central bank said remittances from overseas Filipino workers (OFWs) have allowed households to save money, boosting the country’s savings rate.(MNS Photo)
MANILA (Mabuhay) – The Asian Development Bank (ADB) has further lowered the growth outlook for the Philippines this year while downgrading economic forecast in most Southeast Asian countries, saying the momentum has slowed down.
In a supplement to its Asian Development Outlook 2014 Update released Wednesday, the Manila-based lender trimmed its growth estimates for the Philippine gross domestic product (GDP) to 6 percent in 2014 from 6.2 percent it announced in September.
The Philippine economy grew by 6.1 percent in the first half but the growth pace fell back to 5.3 percent in the third quarter, making it the fourth fastest growing economy in Asia.
This brought the GDP in the first nine months of the year to 5.8 percent.
“Robust private consumption and higher private investment and net exports were insufficient to balance unexpectedly weak public spending,” ADB said in the report.
Of the six countries monitored by ADB, Malaysia was the only country with an outlook maintained for 2014, a situation that helped bring down growth estimates for the subregion.
In the latest update, Southeast Asia’s aggregate GDP is expected to expand by 4.4 percent in 2014 and 5.1 percent in 2015, compared with 4.6 percent and 5.3 percent, respectively, in previous estimates.
While the growth momentum has slowed in the second half of 2014, declining oil prices represent a golden opportunity for many beneficial reforms, according to the lender.
“While growth in the first three quarters of this year were somewhat softer than we had expected, declining oil prices may mean an upside surprise in 2015 as most economies are oil importers,” ADB chief economist Shang-Jin Wei said in a statement.
For 2015, the Manila-based lender maintained its 6.4 percent forecast for the Philippines.
“Continued strong household consumption bolstered by steady growth in remittances and increases in domestic employment will, along with improved government spending, support a pickup in growth next year,” ADB said. (MNS)