FREE Commentary: ADB maintains growth forecast for the Philippines

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Analysis and Recommendation

The Asian Development Bank (ADB) has upgraded its growth outlook for developing Asia to 4.9% in 2023. This is higher than the previous forecast of 4.7% in September. Developing Asia is expected to end the year strong as it will be supported by strong domestic demand, remittances, and recovering tourism. The positive adjustment is seem to lead to a higher than expected growth in China and India.

Meanwhile, Southeast Asia’s growth forecast was downgraded to 4.3% from the earlier projection of 4.6%. The ADB cited lackluster manufacturing growth in Malaysia, Thailand, and Vietnam. Despite that, the ADB has maintained its growth forecast for the Philippines at 5.7%.

Our View: Despite a slight reduction in the growth forecast for Southeast Asia, the ADB’s decision to uphold the Philippines’ growth projection at 5.7% signals confidence in the country’s economic resilience and potential. The ADB’s focus on robust domestic demand, remittances, and recovering tourism accurately reflects the current economic landscape in the Philippines. Concurrently, the modest improvement in projections for overall developing Asia is promising for a crucial economic partner like China.

While challenges persist, such as the manufacturing slowdown in most Southeast Asian nations, the overarching trajectory of regional economic growth supports a bullish outlook, particularly in anticipation of China’s projected recovery.

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