MANILA, Sept. 25 (Xinhua) -- Philippine economic growth in this and the next year will be slightly lower than earlier forecast on the back of a slowdown in the global economy and domestic investment, the Asian Development Bank (ADB) said in its updated report launched on Wednesday.
But the bank said the country's economy should recover its growth momentum in the near term, with domestic private consumption holding up well along with supportive fiscal and monetary policies.
In an update of its flagship annual economic publication, Asian Development Outlook (ADO) 2019, ADB revised its forecast for Philippine gross domestic product (GDP) growth to 6.0 percent in 2019 and 6.2 percent in 2020, against its previous forecast of 6.4 percent for both years.
ADO is the flagship economic publication of the Manila-based bank.
The ADB downward revision in growth for the Philippines comes from the slowdown in domestic investment in the first half of 2019 mainly caused by the delayed passage of the 2019 national budget, which held back public expenditure, particularly on infrastructure.
"Public spending should regain traction for the rest of 2019, with the government committed to catching up with its spending plans, especially as new and larger infrastructure projects get underway," said ADB Country Director for the Philippines Kelly Bird.
Bird said, "the recovery in public spending should also boost private consumption, which is currently well supported by steady overseas workers' remittances, moderate inflation, and low unemployment."
ADB said public expenditure next year is expected to provide a further boost to the economy, with the proposed 12.0-percent increase in the 2020 national budget.
Higher spending on infrastructure and social services, such as health, education, and conditional cash transfers to poor households, will be supported by additional tax revenues, including the proposed higher taxes on alcohol products, among other measures under the government's comprehensive tax reform program, added the ADB.
Moreover, inflation is expected to slow to 2.6 percent in 2019 and 3.0 percent in 2020 in the Philippines, significantly lower than previous ADB forecasts, largely on improved domestic rice supplies following the lifting of quantitative rice import restrictions in February this year, according to the report.