The Asian Development Bank (ADB) has downgraded its 2014 economic outlook for the Philippines to 6% from 6.2% due to the country’s slow growth in the first nine months of the year.
In its latest “Asian Development Outlook Supplement” report, the Manila-based lender said the country’s robust private consumption and higher private investment and net exports were “insufficient to balance unexpectedly weak public spending.”
The country’s gross domestic product (GDP), or the amount of final goods and services produced in the country, reached only 5.8% in the first nine months of the year, slower than the 6.1% attained in the first half of 2014. For the third quarter alone, GDP growth reached only 5.3%.
However, National Economic and Development Authority Director General Arsenio Balisacan said the fourth quarter is expected to be better than the third quarter since the effect of typhoon Ruby, which hit the country this December, is very minimal.
Balisacan earlier said that due to the slow GDP growth in the first three quarters, the country’s economy needs to grow by 8.2% in the last quarter to meet the government’s full-year target for 2014 of 6.5% to 7.5%.
For 2015, ADB has maintained its 6.4% growth forecast for the Philippines.
“Continued strong household consumption bolstered by steady growth in remittances and increases in domestic employment will, along with improved government spending, support a pickup in growth next year and the Update’s growth forecast of 6.4% for 2015,” the report stated.
ADB’s forecast for developing Asia remains steady, with the aggregate GDP expected to grow by 6.1% in 2014, and to expand a bit more quickly in 2015 at 6.2%.
For Southeast Asia, ADB trimmed its forecasts for most of the Southeast Asian economies, bringing down growth projections for the subregion as a whole to 4.4% in 2014 and 5.1% in 2015, both 0.2% down from the previous outlook of 4.6% and 5.3%, respectively.
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