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ADB adjusts Phl GDP view to 4.5%



The country’s local output was seen to grow at a slower rate for the year as multilateral lender Asian Development Bank (ADB) pencilled an adjusted forecast of 4.5 percent for 2021 versus its previous 6.5 percent projection.

ADB country director Kelly Bird said that the varying GDP view among other institutions reflect the heightened economic uncertainty and that the latest move to downscale Philippines’ GDP view considers the recent imposition of strict quarantine measures in the National Capital Region.

“This forecast of at least 4.5 percent includes the imposition of the enhanced community quarantine (ECQ) and the modified one and it also kind of factors in a delay in the reopening of the economy,” Bird explained in a virtual press conference on Wednesday.

“That’s why we are treating this as a flaw on our forecast for this year. That’s the main reason,” he added.

Still, the ADB executive pointed out that another factor that contributed to the adjustment includes the expectation that private investment for the year could be subdued.

While at it, Bird pointed that their projection is at the lower end of other economists’ estimates thus, the upsides to such projection.

“Priority should be given to addressing the scarring effects of the pandemic on private sector employment. Programs supporting workers and firms impacted by labor market adjustments and reforms to boost productivity growth and investment will help counter the negative effects of the pandemic on employment over the medium term,” he explained.

The state’s top economists will soon deliberate whether to adjust or retain their 6.5 to 7.5 percent GDP target for the year.

Poverty target should be kept

In terms of the country’s poverty target, the ADB executive stressed the need to retain such, employing whatever programs or policies required to achieve it.

“It’s always important to keep these targets and the target of achieving 14 percent of poverty. It’s important because that’s where the government can develop programs and policies so that they can ensure adequate funding in the social sector,” Bird said.

“The government has a strong 2021 budget and I would expect the 2022 budget has a strong focus on infrastructure investments and spending in the social sector, particularly social assistance,” he added.

National Economic and Development Authority Undersecretary Rosemarie Edillon earlier said that poverty incidence in the country could climb up within the 15.5 to 17.5 percent range versus the sub-17 percent recorded in 2018.