The Asian Development Bank (ADB) has upgraded its Philippine growth forecasts for this year and the next on account of infrastructure investments as well as strong household consumption.
“GDP (gross domestic product) growth forecasts are raised from 6.5 percent to 6.7 percent for 2017 and from 6.7 percent to 6.8 percent for 2018,” the Manila-based lender said on Wednesday in a supplement to its Asian Development Outlook.
The forecast for 2017 is lower than last year’s actual expansion of 6.9 percent but falls within the government’s 6.5-7.5 percent target. The 2018 projection, meanwhile, is lower than the official 7-8 percent goal.
The Philippine economy expanded by a better-than-expected 6.9 percent in the third quarter. Results for the second quarter were also revised upwards and year-to-date growth, at 6.7 percent, has kept the country on track to hitting the 6.5-7.5 percent target.
“This outlook assumes that growth in the government’s infrastructure program will accelerate, supported by improvements in budget execution, with more large investment projects under way,” the ADB said.
The lender noted that public expenditure had accelerated, particularly for infrastructure.
“The government is on track to achieve its target of spending 5.3 percent of GDP on public infrastructure this year,” it said.
Household consumption, meanwhile, was said to have remained strong despite moderating slightly from last year.
The ADB is the latest to adjust its full-year forecast for the Philippines following the surprisingly strong third quarter result.
ING Bank Manila has raised its projection to 6.7 percent from 6.6 percent while IHS Markit also raised its forecast to 6.5 percent from 6.4 percent.
The research arm of Metropolitan Bank and Trust Co. announced an upward revision to 6.8 percent from 6.6 percent and Singapore-based DBS, meanwhile, expects full-year growth to hit 6.7 percent, up from its previous forecast of 6.4 percent.