MANILA, Philippines – The Asian Development Bank (ADB) slashed its economic growth forecast for the Philippines for the 3rd consecutive time amid the global trade slowdown and the budget impasse earlier this year, the multilateral lender said on Thursday, July 18.
The ADB now expects the country’s gross domestic product (GDP) to grow by 6.2% in 2019, lower than its previous revised forecast of 6.4%. Last year, the ADB projected GDP growth to hit 6.9% in 2019.
Economic growth went down to a 4-year low of 5.6% in the 1st quarter of 2019 due to the delayed passage of the 2019 budget.
For 2020, the ADB maintained its forecast of 6.4%.
The government has already lowered its targets for 2019 to 6% to 7% from an optimistic 7% to 8% target band. In 2018, Philippine GDP hit an average of 6.2%.
The ADB said it sees public investments rebounding during the 2nd half of 2019. Slowing inflation, low unemployment, and steady remittances are expected to support household consumption.
Globally, the ADB noted a lackluster trading environment dragging down economic growth across regions.
“Even as the trade conflict continues, the region is set to maintain strong but moderating growth,” said ADB Chief Economist Yasuyuki Sawada.
“However, until the world’s two largest economies (United States and China) reach agreement, uncertainty will continue to weigh on the regional outlook,” he added.
The outlook for Southeast Asia has been downgraded slightly to 4.8% in 2019 and 4.9% in 2020 due to the US-China trade war and a slowdown in the electronics cycle. – Rappler.com