MANILA, July 19 (Xinhua) -- Asian Development Bank (ADB) has kept its economic growth estimates for the Philippines at 6.8 percent in 2018 and 6.9 percent in 2019, said a new ADB report released on Thursday.
In its Asian Development Outlook (ADO) 2018 report supplement, the Manila-based bank said the Philippine economy grew by 6.8 percent in the first three months of 2018. The industry recorded the fastest growth, at 7.9 percent while services continued to expand strongly by 7.0 percent. Growth in agriculture slowed to 1.5 percent.
ADB said the Philippines' sustained growth momentum was attributed mainly to accelerated spending on government infrastructure development and other programs to develop human capital. Public construction grew by 25.1 percent and government consumption by 13.6 percent.
For this year and next year, ADB maintained the Philippines' growth outlook at 6.8 percent in 2018 and 6.9 percent in 2019.
Based on analysis from ADB, the Philippine public spending on social services and infrastructure will be supported by better budget execution and higher revenue mobilization. Low unemployment and steady remittances continue to drive household consumption. As part of the ongoing tax reform, a reduction in personal income tax for most of the workforce will boost disposable income and consumption.
Meanwhile, inflation in the Philippines reached 5.2 percent in June 2018, driven largely by price hikes for fuel and related items and by sporadic shortages of key food items.
ADB revised the inflation forecast for 2018 to 4.3 percent from the earlier forecast of 4.0 percent. Higher excise taxes on fuel and some commodities as part of the Tax Reform for Acceleration and Inclusion Act, which took effect in January 2018, are contributing factors.
The ADB's economic publication Outlook provides a comprehensive analysis of macroeconomic issues in developing Asia, including growth projections for major economies.