PH growth 2nd fastest in Southeast Asia: ADB

The Philippines is expected to become the second fastest growing economy in Southeast Asia after Vietnam over the next years, supported by robust public and private investment, the Asian Development Bank (ADB) said.

In a supplement to its Asian Development Outlook 2018 Update report released on Wednesday, the ADB maintained its economic growth outlook for the Philippines at 6.4 percent this year and 6.7 percent for 2019.

The Philippine gross domestic product (GDP) remained strong at 6.3 percent in the first three quarters of 2018, though moderating from 6.8 percent last year.

Investment was the biggest contributor to growth, followed by household consumption.

The ADB also retained its growth forecast for Southeast Asia at 5.1 percent for 2018, assuming robust consumption and infrastructure investment.

“Robust domestic demand continued to drive growth in the sub-region. Infrastructure spending remained strong in Brunei Darussalam, Indonesia, the Philippines, and Thailand but declined in Malaysia,” the report said.

However, the Update identified the escalating trade conflict as the largest downside risk, even after the leaders of the People’s Republic of China (PRC) and the United States agreed to a 90-day truce precluding any new tariffs to allow time for bilateral negotiations -which also lends businesses a wider window for frontloading trade.

“The truce on trade tariffs agreed by the United States (US) and the People’s Republic of China (PRC) is very welcome but the unresolved conflict remains the main downside risk to economic prospects in the region,” ADB Chief Economist Yasuyuki Sawada said in a statement.

“That said, we are keeping our forecasts for the region’s growth unchanged for this year with some of the biggest economies continuing to hold up well,” he said.