The ASEAN+3 Macroeconomic Research Office (AMRO) said on Tuesday that Philippine economic growth likely accelerated by 7.3 percent in 2022, faster than the previous forecast of 6.9 percent.
The Philippines had great strength [performance] Last year… despite the headwinds in the last quarter,” AMRO Chief Economist Hoe Ee Khor said during the launch of the ASEAN+3 Regional Economic Outlook (AREO) 2022 report.
The adjustment falls within the government’s target of 6.5 to 7.5 percent for this year. GDP growth through the end of the third quarter was above target of 7.7%.
Official results for the full year are expected before the end of this month.
Meanwhile, AMRO’s 2023 estimate was trimmed to 6.2 percent from 6.3 percent, which Khor described as a normalization in line with a weak global environment.
It remains within the government target of 6.0-7.0 percent.
As for the Association of Southeast Asian Nations (ASEAN), AMRO said growth in 2022 is also likely to be higher at 5.6% instead of the 5.3% previously forecast.
Growth this year is expected to stabilize at 4.8 percent, slightly slower than the 4.9 percent forecast earlier.
It is estimated that China, the region’s largest economy, grew at a slower rate of 3.0 percent in 2022 due to recurring Covid-19 outbreaks.
Khor said rising global headwinds remove the wind from the momentum of foreign trade in the region. Moreover, the burden on economic activity from US monetary tightening will be fully felt this year, translating into weaker export orders for the region.
ASEAN+3 includes the ten ASEAN member countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, as well as China (including Hong Kong), Japan and Korea.
AMRO acts as a political advisor to the group’s members.
Meanwhile, the continued resumption of tourism – particularly as Chinese tourists return following the country’s reopening – is expected to fuel much-needed growth.
“China’s recovery will be a huge shock in the face of headwinds from the US and Europe,” Khor said.
“a lot of others [Asean] Countries are leaning towards China as a major source economy… so they will benefit from a strong recovery in China.”
As for inflation in the Philippines, the Africa Regional Office revised its forecast for 2023 to 4.3 percent from 4.0 percent.
Downside risks include escalating energy prices and the emergence of more virulent variants of Covid-19, among others.
Headline inflation rose to 8.1% in December, bringing the 2022 average to 5.8%, the highest rate in 14 years.
It also prompted Bangko Sentral ng Pilipinas to raise key interest rates by a total of 350 basis points, taking the policy rate to a 14-year high of 5.5 percent.