THE Asian Development Bank (ADB) again lowered its 2019 economic growth forecast for the country on the back of sluggish global growth and domestic investment.
In its latest “Asian Development Outlook” report, the Manila-based multilateral lender said it expected the Philippines’ gross domestic product (GDP) to grow by 6 percent this year, trimmed from the 6.2 percent projected in July, 6.4 percent in April and 6.7 percent in September 2018.
Economic growth projection for 2020 was also slashed to 6.2 percent from the earlier 6.4 percent.
During a briefing at his organization’s headquarters in Mandaluyong City, ADB Country Director Kelly Bird attributed the lower projection to the slowdown in domestic investment in the first half of the year on account of the delay in the approval of the 2019 national budget.
“The plateauing of domestic investment was caused mainly by [the] contraction in public spending on infrastructure in the first half and relatively high interest rates,” the ADB said in its report.
“The delayed passage of the 2019 national budget and a ban on public infrastructure spending in the run-up to midterm elections in May 2019 held back public infrastructure,” it added.
The budget approval delay and the spending ban were also blamed by the Philippine Statistics Authority for the 5.5-percent GDP growth recorded for the second quarter. The figure was a slight deceleration from the 5.6 percent posted in the first quarter.
Despite this, Bird expects state spending to rebound in the second half.
“Public spending should regain traction for the rest of 2019, with the government committed to catching up with its spending plans, especially as new and larger infrastructure projects get underway,” he said.
Meanwhile, the ADB sees the country’s inflation easing on the back of improved domestic rice supply after restrictions on rice imports were lifted in February.
Consumer price growth projections for 2019 and 2020 were trimmed to 2.6 percent from 3 percent and to 3 percent from 3.5 percent, respectively.
Inflation last month fell to a 34-month low of 1.7 percent from 2.4 percent in July and 6.4 percent in August 2018.