MANILA (Xinhua) – Asian Development Bank (ADB) has kept its economic growth estimates for the Philippines at 6.8 per cent in 2018 and 6.9 per cent in 2019, said a new ADB report released yesterday.
In its Asian Development Outlook (ADO) 2018 report supplement, the Manila-based bank said the Philippine economy grew by 6.8 per cent in the first three months of 2018. The industry recorded the fastest growth, at 7.9 per cent while services continued to expand strongly by 7.0 per cent. Growth in agriculture slowed to 1.5 per cent.
ADB said the Philippines’ sustained growth momentum was attributed mainly to accelerate spending on government infrastructure development and other programmes to develop human capital.
Public construction grew by 25.1 per cent and government consumption by 13.6 per cent.
For this year and next year, ADB maintained the Philippines’ growth outlook at 6.8 per cent in 2018 and 6.9 per cent in 2019.
Based on analysis from ADB, the Philippine public spending on social services and infrastructure will be supported by better budget execution and higher revenue mobilisation.
Low unemployment and steady remittances continue to drive household consumption. As part of the ongoing tax reform, a reduction in personal income tax for most of the workforce will boost disposable income and consumption.
Meanwhile, inflation in the Philippines reached 5.2 per cent in June 2018, driven largely by price hikes for fuel and related items and by sporadic shortages of key food items.
ADB revised the inflation forecast for 2018 to 4.3 per cent from the earlier forecast of 4.0 per cent. Higher excise taxes on fuel and some commodities as part of the Tax Reform for Acceleration and Inclusion Act, which took effect in January 2018, are contributing factors.
The ADB’s economic publication Outlook provides a comprehensive analysis of macroeconomic issues in developing Asia, including growth projections for major economies.
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