The Asian Development Bank (ADB) has reiterated its view that the Philippine economy will grow by an even faster clip in the years ahead on the back of rising manufacturing and other investments.
Ramesh Subramaniam, ADB Director General for Southeast Asia, said rising labor productivity, as well as investments in manufacturing and technology are building up the economy’s productive capacity.
“This means, there’s even further room for the Philippine economy to grow,” he said in the media briefings Friday on the sidelines of the 51st ADB annual meeting, which the Philippines is hosting.
Subramaniam said the ADB does not see any material risk of overheating for the Philippines, even as it has become one of the fastest growing economies in Asia in recent years.
He said rising investments are sufficiently meeting robust domestic demand, thus helping keep inflation relatively manageable.
Based on ADB’s latest forecasts, the Philippine economy will grow by 6.8 percent this year and 6.9 in 2019, up from 6.7 percent in 2017.
The government expects the Philippines to hit upper middle income status by 2019 and to slash poverty by about a third to only 14 percent by 2022. Growth drivers include rising private-sector investments, government infrastructure spending, and household consumption.
ADB has been one of the Philippines’ major development partners for over 50 years, serving as among the biggest sources of official development assistance.
Subramaniam said the ADB is keen on adapting to the changing financing needs of member economies, including those that are reaching higher income levels like the Philippines.
ADB has earlier expressed support to the Philippines’ most ambitious infrastructure program to date. Under the “Build Build Build” program, the government will spend about 160 billion U.S. dollars on vital public infrastructure all over the country.
The infrastructure projects will be financed by a mixture of tax revenues and borrowings, including official development assistance or ODA, which offers interest rates much lower than commercial rates.
Among the recently announced infrastructure financing from the ADB is a 380 million U.S. dollars loan that will help improve 280 kilometers of national roads and bridges in Mindanao in the southern Philippines. The project is expected to expand access to social services and economic opportunities, more so in poorest regions in the South.