PH GDP growth to outpace ASEAN peers

Metro Manila (CNN Philippines) — The Asian Development Bank (ADB) expects the Philippines to outpace several of its Southeast Asian neighbors in economic growth for this year and the next, according to a supplement to the Asian Development Outlook (ADO) for 2015.

In the report, the ADB projects the country’s gross domestic product (GDP) to grow by 6.4% in 2015 and 6.3% in 2016 — the same figures from its March forecast. However, the figures still sit below the government’s target of 7% to 8% for this year and the next.

The overall growth forecasts for Southeast Asia have been trimmed to 4.6% this year and 5.1% next year, from previous projections of 4.9% and 5.3%, respectively. Malaysia was the only other Southeast Asian country in the report to have its GDP forecasts retained, at 4.7% and 5.0% for the same comparable periods.

The ADB said that strong private investment and household consumption in the Philippines will help maintain its growth outlook. Next year’s elections will also play a significant role: “Election-related spending is expected to boost domestic demand through May 2016, when elections will be held.”

However, the institution noted that several factors may suppress growth. “Risks to the outlook include weaker-than-expected recovery in the major industrial economies and continued slow public spending despite government measures taken to improve budget execution.”

The country’s GDP growth slowed to 5.2% during the first three months of 2015 — the slowest pace in three years — due to sluggish exports and weak government spending, the ADB said.

Philippine inflation is expected to sit below the Southeast Asian average for 2015 and 2016. The figure is projected to reach 2.8% this year and 3.3% next year, in contrast to South East Asia’s comparable rates of 3.1% and 3.4%, respectively.

“Slower growth in the PRC [China] is likely to have a noticeable effect on the rest of Asia given its size and its close ‎links with other countries in the region through regional and global value chains,” said ADB Chief Economist Shang-Jin Wei in a statement. –Paolo Taruc, CNN Philippines