The Asian Development Bank on Tuesday upgraded its 2016 growth forecast for the Philippines to 6.8 percent from the previous estimate of 6.4 percent, following three quarters of strong growth.

The Manila-based multilateral lender, in its Asian Development Outlook supplement report, also revised upward the 2017 growth outlook for the country to 6.4 percent from 6.2 percent.

“Such brisk growth is expected to ease as the impact of spending for the May elections fades, and in light of global economic uncertainties. In 2017, domestic demand will continue to underpin economic growth,” ADB said.

“In the Philippines, robust domestic demand across the economy spurred stronger-than-expected GDP growth at 7 percent year on year in the first three quarters. The biggest contributor to growth from the demand side was investment, both public and private,” the bank said.

The Philippine economy grew 7 percent in the first three quarters, on strong domestic demand.

ADB said among the Association of Southeast Asian Nations, the forecasts for the Philippines and Thailand were revised upward, offsetting the downgrade in other member economies.

It said infrastructure investment continued to play an important role in driving growth in the Philippines and Thailand.

“This outlook assumes that investments will continue to be expanded on efforts to upgrade public infrastructure and improve the business environment,” ADB said.

Meanwhile, economic growth in developing Asia remained broadly stable, but a slight slowdown in India trimmed the region’s growth outlook for 2016.

ADB downgraded the 2016 growth outlook for developing Asia to 5.6 percent, below its previous projection of 5.7 percent. For 2017, the forecast was unchanged at 5.7 percent.

“Asian economies continue their robust expansion in the face of global economic uncertainties,” said ADB deputy chief economist Juzhong Zhuang.

“Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum into the future,” he said.

In Southeast Asia, growth forecasts remained unchanged at 4.5 percent in 2016 and 4.6 percent in 2017, with Malaysia and the Philippines expecting stronger growth due to a surge in domestic consumption and public and private investment, compared to lower growth forecasts in Brunei Darussalam, Myanmar and Singapore.

13 December 2016
By Gabrielle H. Binaday