The Asian Development Bank (ADB) has kept its growth outlook for the Philippines at 6 percent for this year, while it lowered the inflation forecast to 3.6 percent from 3.8 percent.

The ADB economic growth forecast will meet the minimum target of the Marcos administration for this year. The government eyes up to 7 percent growth.

The multinational institution’s inflation outlook also falls within the government outlook of 3 to 4 percent for 2024.

ADB said the economic growth will mainly be driven by government spending on infrastructure at 5 to 6 percent of gross domestic product annually.

“Most of the ingredients for the Philippines’ sustained economic growth are in place — rising government revenues are boosting public expenditures on infrastructure and social services, increasing employment is driving consumption, and reforms to open the economy to more investments are underway,” ADB Philippines country director Pavit Ramachandran said.

Apart from this, ADB said inflation will likely decline for the rest of the year due to lower tariff on imported rice at 15 percent from 35 percent.

The National Economic and Development Authority approved 186 infrastructure flagship projects as the Marcos administration aimed for long-term economic growth toward an upper-middle-income Philippines.

66 projects being built

ADB shared 66 projects are now being built while 31 have been green-lit for construction as of August.

The projects included roads, hospitals, airports and seaports, railways, and digital infrastructure. They include the Malolos Clark Railway Project, South Commuter Railway Project, Bataan-Cavite Interlink Bridge Project, and Integrated Flood Resilience and Adaptation Project.

According to the Philippine Statistics Authority (PSA), government expenditure in the second quarter grew by 10.7 percent from a contraction of 7.1 percent in the same period a year ago. Meanwhile, gross capital formation consisting of fixed assets and machinery rose 11.5 percent from 0.04 percent.

Apart from this, ADB said inflation will likely decline for the rest of the year due to lower tariff on imported rice at 15 percent from 35 percent.

In August, overall inflation dropped to 3.3 percent from 4.4 percent in July as rice inflation slid to 14.7 percent from 20.9 percent rate, marking the slowest inflation since October 2023.

For next year, ADB projected higher local economic growth at 6.2 percent and lower inflation at 3.2 percent. Meanwhile, the government expects economic growth to reach 6.5 to 7.5 percent and inflation to range from 2 to 4 percent.