ADB Retains PH Economic Growth Forecast: 6.0% for 2024 and 6.2% in 2025

The Asian Development Bank released a report stating that moderate inflation, monetary easing, and continued state investment, particularly on large infrastructure projects, would boost Philippine economic growth this year and next.

​In its Asian Development Outlook (ADO) September 2024 report, the ADB maintained its growth forecast for the Philippine economy at 6.0% in 2024 and 6.2% in 2025. According to the analysis, broad-based domestic demand will drive GDP growth, with lower inflation and interest rates supporting it.

ADB reduced its inflation prediction for 2024 to 3.6% from 3.8% in April, noting a persistent decline in food prices, which is attributed in part to decreased rice import tariffs. Inflation is anticipated to fall further to 3.2% in 2025, down from the prior prediction of 3.4%.

“Most of the ingredients for the Philippines’ sustained economic growth are in place—rising government revenues are boosting public expenditures on infrastructure and social services, increasing employment is driving consumption, and reforms to open the economy to more investments are underway. With inflation slowing, the country is in a strong position to lead growth in Southeast Asia,” said ADB Philippines Country Director Pavit Ramachandran.

However, risks exist from prospective extreme weather occurrences, which could raise inflation. External concerns such as a greater downturn in major advanced countries and the People's Republic of China, financial volatility caused by US monetary policy decisions, geopolitical tensions, and rising global commodity prices all pose risks to growth, according to the report.

The Philippine government forecasts public infrastructure investment to range between 5.0% and 6.0% of GDP each year from 2024 to 2028, after reaching 5.8% in 2023. The government's "Build Better More" infrastructure program contains 66 existing projects and another 31 approved for implementation by August 2024.

The infrastructure program intends to improve physical connectivity by building railways, bridges, and airports, as well as improving water management through irrigation, water supply, and flood control. This initiative prioritizes climate change mitigation and adaptation, as well as digital connection, energy, and agriculture projects.

ADB is funding vital infrastructure projects such as the Malolos Clark Railway Project and the South Commuter Railway Project, which will connect Metro Manila to the northern and southern provinces of the Luzon area. It also supports the Bataan-Cavite Interlink Bridge Project and the Integrated Flood Resilience and Adaptation Project, both of which aim to improve flood and climate change resilience in the country's three major river basins.
​
ADB is dedicated to establishing a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while also continuing its efforts to eradicate extreme poverty. It was established in 1966 and is owned by 68 people, 49 of whom are from the region.