The Asian Development Bank said Wednesday that it had lowered its outlook for developing Asia because of current risks.

In the Asian Development Outlook 2022 report, the multilateral lender raised the Philippines' growth forecast from 6.5 percent in September to 7.4 percent in December.

ADB mentioned that the 2022 growth forecast for the Philippines was revised after domestic demand spurred the third-quarter growth above expectation.

It raised its outlook for the Philippines due to its "surprisingly strong" performance.

In the updated ADO, ADB said that "worsening" global headwinds like China's repeated Covid-19 lockdowns, Russia's invasion of Ukraine, and slower global growth lowered the GDP growth outlook for developing Asia from 4.3 percent to 4.2 percent.

ADB added that developing Asia's GDP is expected to grow by 4.6 percent in 2023, less than the previous estimate of 4.9 percent.

But the ADB report says that the growth forecast for Southeast Asia's GDP in 2022 has been raised to 5.5 percent, thanks to strong growth in the third quarter in Malaysia, Thailand, Timor-Leste, Vietnam and the Philippines.

"Stronger consumption, exports, and services, particularly for tourism, lifted growth forecasts for these economies," it said.

The bank said, however, that growth rates are unlikely to stay the same for these countries in 2023 because of the possible effects of inflation, rising interest rates, and tight public finances that limit government spending.

ADB issues new forecast
"The Philippine economy has shown strong underlying growth momentum and resilience in 2022 and this is expected to continue in 2023, with GDP growth converging towards its longer-term growth rate of about six percent," ADB Philippines Country Director Kelly Bird said.

But Bird said that there are risks to growth in 2023, such as inflation, more interest rate hikes, and a sharper drop in GDP growth in advanced countries than expected.

The ADB said that compared to its Southeast Asian neighbors, the Philippines will be at the higher end of the range.