MANILA, Philippines – The Asian Development Bank (ADB) upgraded its growth outlook for the country for 2017 and 2018, as the government's massive infrastructure drive finally started to take hold.
The ADB upgraded its 2017 and 2018 gross domestic product (GDP) forecast for the Philippines to 6.7% and 6.8%, respectively, from the previous 6.5% and 6.7%.
The new estimates were given in a supplement to the ADB's Asian Development Outlook 2017 report released on Wednesday, December 13.
This outlook, the ADB said in the report, "assumes that growth in the government's infrastructure program will accelerate, supported by improvements in budget execution, with more large investment projects underway."
The Philippine economy has picked up steam of late, expanding by 6.7% in the first 3 quarters of 2017 on accelerating investment and robust consumption.
"Public expenditure accelerated, particularly for infrastructure with the government on track to achieve its target of spending 5.3% of GDP on public infrastructure this year," said the ADB.
"Household consumption remained strong despite moderating slightly from last year," it added.
The ADB also pointed out that net exports turned positive in the first 9 months, reversing a deficit in 2016. On the supply side, meanwhile, services generated nearly 60% of GDP growth, spurred largely by trade, business process outsourcing (BPO), finance, and real estate services.
This in turn helped the country's manufacturing sector which contributed about 30% of the expansion in GDP, especially in foods processing.
Finally, the ADB also noted that agriculture recovered from a dry spell last year under El Niño.
The ADB's rosier projections for the Philippines mirror the growth forecast for Southeast Asia as a whole, which was upgraded to 5.2% for both 2017 and 2018 from 5.0% and 5.1% last September.
The optimism extends to most of Asia as well, with the forecast for Developing Asia raised to 6.0% from 5.9% for 2017 while the 5.8% forecast for 2018 was maintained.
"Developing Asia's growth momentum, supported by recovering exports, demonstrates that openness to trade remains an essential component of inclusive economic development," said ADB Chief Economist Yasuyuki Sawada. – Rappler.com