The Asian Development Bank (ADB) has maintained its growth forecast for the Philippines at 6% for 2024 and 6.2% for 2025, citing easing inflation, monetary policy adjustments, and sustained government infrastructure spending.
A key driver of the improved outlook is the anticipated decline in food prices.
The ADB has lowered its inflation forecast for 2023 to 3.6% from 3.8%, primarily due to reduced tariffs on rice imports.
President Ferdinand Marcos Jr.’s recent executive order lowering the rice import tariff has helped to alleviate inflationary pressures.
In addition to rice, the government has also extended lower tariffs on corn, pork, and mechanically deboned meat.
These measures are expected to further ease inflationary pressures and create a more favorable environment for economic growth.
The ADB’s forecast also takes into account the Bangko Sentral ng Pilipinas’ (BSP) recent interest rate cut.
The central bank’s decision to lower the policy rate by 25 basis points to 6.25% in August is expected to stimulate economic activity and support growth.
Furthermore, the government’s infrastructure spending is expected to play a pivotal role in driving economic development.
The “Build Better More” program, which includes a number of ongoing and planned projects, aims to improve physical connectivity, water management, digital connectivity, energy, and agriculture.
With inflation slowing and reforms to open the economy to more investments underway, the Philippines is well-positioned to lead growth in Southeast Asia, according to the ADB.
