MANILA (ANN/PHILIPPINE DAILY INQUIRER) – The Philippines is poised to take the lead in economic growth within Southeast Asia, despite the region experiencing a decline in overall prospects over the past three months, primarily attributed to sluggish manufacturing activities.
Conversely, the Asian Development Bank’s recent update of the Asian Development Outlook, unveiled on Wednesday, indicates a positive shift for developing Asian economies.
The collective growth forecast for these economies in 2023 has been revised upward to 4.9 per cent, propelled by enhanced expectations in both China and India.
This is faster compared to the forecast of 4.7 per cent made in September. Meanwhile, the outlook for next year is maintained at 4.8 per cent.
For the Philippines alone, the 2023 growth rate forecast is kept at 5.7 per cent.
This makes the Philippines the top performer as the outlook for Vietnam was lowered to 5.2 per cent from 5.8 per cent.
The revised outlook for Vietnam mirrors that for the Southeast Asian region, which was dialed down to 4.3 per cent from 4.6 per cent.
The ADB said upgrades for China (5.2 per cent from 4.9 per cent) and India to 6.7 per cent more than offset a lowering of the forecast for Southeast Asia, caused by lackluster performance in the manufacturing sector.
“Developing Asia continues to grow at a robust pace, despite a challenging global environment,” ADB chief economist Albert Park said in a statement.
“Inflation in the region is also gradually coming under control,” Park said. “Still, risks remain, from elevated global interest rates to climate events such as El Niño.”
He added that governments in Asia and the Pacific need to remain vigilant to ensure that their economies are resilient, and that growth is sustainable.
Further, the ADB said risks that its latest outlook may not come to pass are coming from persistently high interest rates in the United States and other advanced economies, which could contribute to financial instability in vulnerable economies in the region, especially those with high debt.
Also, posing risks to the outlook are coming from potential supply disruptions caused by the El Niño weather pattern or the Russian invasion of Ukraine, which could rekindle inflation—especially in food and energy.
Headline inflation in the Philippines slowed down for the second month in a row to settle at 4.1 per cent in November, approaching the upper limit of the Bangko Sentral ng Pilipinas’ (BSP) target rate of two per cent to four per cent.
According to the BSP, the latest monthly print was consistent with its projections that inflation will likely moderate over the near term due to easing supply-side price pressures and negative base effects.
Still, the Monetary Board deems it necessary to keep monetary policy settings sufficiently tight until a sustained downward trend in inflation becomes evident, the BSP said.
