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The Asian Development Bank has revised its growth outlook for the Philippine economy as inflation hits at the highest record of 6.4% in almost 10 years.
In the annual economic publication, the ADB said it expects the Philippine economy to grow 6.4 percent in 2018, before picking up to 6.7 percent next year. If realized, this would fall below the government’s 7-8 percent goal.
In its latest growth forecasts on the Philippine economy, ADB stated that it is lower than its previous estimates of 6.8 percent for this year and 6.9 percent next. The Philippines which is now facing the largest downtrend adjustment for this year’s growth among Southeast Asian economies.
As per ADB’s updated outlook on the Philippines was better than its growth projections of 6.0 percent and 5.1 percent on Developing Asia for 2018 and 2019, respectively, as the escalating US-China trade war tests the region’s resilience.
The revised outlook for the Philippines “reflects a moderation in agricultural output and exports, as well as higher inflation and continued global monetary tightening. Inflationary pressures are expected to taper off next year as tighter domestic monetary policy begins to take effect,” it added.
While Duterte’s administration was dismissing that the growth is due to higher inflation and weak Philippine peso, the economic slow down in the Philippines has caused alarm and concerned to policymakers since the 6.4% inflation is the highest for almost 10 years.
There are some analysts who expect slow down in the economic growth in the Philippines and urged the President not to have myopia in his war against drug which has just worsened and not abated at all as there have been billions of drugs that were smuggled in to the Philippines in almost a span of a month.
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Meanwhile, despite the slowdown in the economy, Kelly Bird ADB Country Director for the Philippines is bullish and said,“The Philippines’ growth outlook remains stable despite moderating slightly in the first half of the year, as the country’s economic fundamentals are strong.”
“We’re expecting growth to slowly pick up as public investment in infrastructure and social sectors accelerate and key economic sectors continue to perform solidly. But the current system, particularly the quantitative restrictions and the National Food Authority are not working for Filipinos is a good opportunity to start looking at agriculture in the Philippines and ways to improve productivity”, Bird added.
Malacañang acknowledged the ADB’s assessment on the economy by saying, “We expected this slowdown vis-a-vis our growth target for the year, given that certain policy decision… contributed to the deceleration.”