PHL growth to slow, outdo many in Asia

PHILIPPINE gross domestic product (GDP) growth will likely ease this year — the only Southeast Asian economy that will do so from 2016 — in the face of external headwinds, but the country will still outperform many in Asia and most regional averages, according to the Asian Development Bank’s (ADB) latest estimates.

The Asian Development Outlook 2017: Transcending the Middle-Income Challenge which ADB published yesterday showed the regional lender retaining its 6.4% GDP growth projection for the Philippines this year which it first penciled in December 2016.

Philippine economic growth is then expected to pick up to 6.6% next year.

Those projections come from 2016’s actual 6.9% — upgraded yesterday by the Philippine Statistics Authority (PSA) from a preliminary 6.8% reading reported in late January, on upward adjustments in mining and quarrying, public administration and defense, construction, and compulsory social security — and compare to government targets of 6.5-7.5% and 7-8% for this year and 2018, respectively.

ADB said it expects robust household demand — which contributes nearly 70% to GDP — the government’s infrastructure buildup, as well as strong private and public investments that fueled Philippine growth in 2016 to anchor the economy this year against external headwinds.

“The Philippines is the only economy in Southeast Asia projected to see lower growth in 2017, as smaller remittances from the Gulf states and lower demand from trading partners offset a healthy rise in domestic consumption and investment,” the report read.

COMPARISONS

Philippine projections compare favorably against most regional averages for this year and next.

Specifically, the 6.4% Philippine projection for this year compares to Southeast Asia’s 4.8%, East Asia’s 5.8%, Central Asia’s 3.1%, the Pacific’s 2.9%, as well as Developing Asia’s (a category embracing all ADB’s 45 members) 5.7% and 6.3% for Developing Asia excluding “newly industrialized economies” (NIEs) China, Hong Kong, Singapore, South Korea and Taiwan.

South Asia, however, will see a faster 7.0% average.

Next year will see the Philippines’ projected 6.6% compare to Southeast Asia’s 5.0%, East Asia’s 5.6%, Central Asia’s 3.5%, the Pacific’s 3.3%, as well as Developing Asia’s 5.7% and Developing Asia excluding NIEs’ 6.2%.

Again, only South Asia will fare better with a 7.2% average for 2018.

The picture is mixed, however, when viewed within Southeast Asia, with the less-developed economies of Cambodia, Laos and Myanmar outpacing the Philippines both for 2017 and 2018.

Still, among Southeast Asian peers the Philippines is frequently compared with, only Vietnam will do marginally better at 6.5% and 6.7% for this year and next, respectively.

Two Asian giants to which the Philippines is compared are also expected to do generally better.

China’s economy is projected to grow by 6.5% this year before slowing to 6.2% in 2018, from 6.7% last year.

India is seen as one of the fastestgrowing major Asian economies, expanding by 7.4% this year and by a faster 7.6% in 2018 from 7.1% in 2016.