In a briefing yesterday during the Businessworld and Philippine Airlines Asean Regional Forum, ADB country economist Aekopol Chongvilaivan said the reason for the upward revision is the country’s better-than-expected economic growth in the third quarter of the year.
MANILA, Philippines – The Asian Development Bank (ADB) has revised upward anew its economic growth projection for the Philippines to 6.8 percent for 2016 and 6.4 percent for 2017.
This is ADB’s third revision after a revised 6.4 percent and 6.2 percent economic growth forecast for 2016 and 2017, respectively. The original forecast was six percent for 2016 and 6.1 percent for 2017.
In a briefing yesterday during the Businessworld and Philippine Airlines Asean Regional Forum, ADB country economist Aekopol Chongvilaivan said the reason for the upward revision is the country’s better-than-expected economic growth in the third quarter of the year.
“Basically, it’s because of the third quarter (performance). Growth is much higher than expected and export performance is much better than expected and this is supported by a weaker peso,” Chongvilaivan said.
Exports rose to $5.211 billion in September from $4.960 billion a year ago, according to the Philippine Statistics Authority (PSA).
On the other hand, Chongvilaivan said fourth quarter GDP may go down slightly due to the uncertain global economy.
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“We expect to be slightly going down due to the uncertain global economy so we expect fourth quarter to slow down from the third quarter,” Chongvilaivan said.
The Philippine economy grew 7.1 percent in the third quarter of the year, cementing the country’s chance of achieving the six – to seven percent target for the whole of 2016.
This growth is above the median market expectation of 6.8 percent.
The Philippine economy’s growth is higher than China’s 6.7 percent, Vietnam’s 6.4 percent, Indonesia’s five percent, and Malaysia’s 4.3 percent. India has not yet released their data. For the fourth quarter, the Philippines only needs to attain at least 3.4 percent growth to attain the low-end target of six percent.
To reach the high-end target of seven percent, the Philippines needs to grow by 6.9 percent in the fourth quarter.
Chongvilaivan said that to sustain the country’s growth, the Philippine government needs to boost investments in infrastructure.
“The Philippines needs more infrastructure,” he said.
He said there is room for this given the country’s huge fiscal space.
The Duterte administration, for its part, has vowed to usher in what it calls the golden age of infrastructure by boosting infrastructure spending.
During the same forum, Budget Secretary Benjamin Diokno said the proposed infrastructure budget for 2017 is P860.7 billion from the proposed P3.35 trillion national budget.
“From 2017 to 2022, infrastructure spending will be as much as P9 trillion,” Diokno also said.
He said this is part of efforts to strengthen the domestic economy.
