Rising public infrastructure spending and improving consumer confidence will support the Philippines’ economic growth this year and next amid progress in the country’s vaccination programme, the Asian Development Bank (ADB) said on 22 September.
In its latest report on Asian economies, ADB kept its previous forecasts from April for growth in the Philippines’ gross domestic product (GDP). The Philippine economy is projected to grow by 4.5 percent in 2021 and by 5.5 percent in 2022, ADB said in its Asian Development Outlook (ADO) 2021 Update.
The Philippines is showing signs of a gradual recovery in economy, while the upturn in domestic demand and favourable external trends are aligned with the projections announced in April, ADB said.
The key risk to the forecast is outbreak and spread of newer more contagious COVID-19 variants, but so far the Philippine economy looks to have regained its footing, the development bank said.
Public infrastructure investments rose by 39.1 percent year over year in July 2021, and the government is on track to achieve its target of raising infrastructure spending to at least 5 percent of GDP in 2021 and 2022, up from a 4.8-percent share in 2020, ADB’s report says.
The economic recovery will be boosted by the government’s policy reforms and expansionary fiscal program, with a fiscal deficit of 7.5 percent of GDP expected in 2022, according to the report.
“The economy has regained its footing and is on the right growth path. But the recovery remains fragile due to the threat posed by more infectious COVID-19 variants,” said ADB Philippines Country Director Kelly Bird.
“Vaccination remains key to the economy’s safe reopening. We are actively supporting the government’s efforts to achieve its national vaccination targets through our health-related assistance.”