ADB scales down Philippine economic growth to 4.5 pct in 2008
16/9/2008 18:04
The Asian Development Bank (ADB) today said it has downgraded the economic
growth forecast for the Philippines to 4.5 percent in 2008 and raised the
inflation forecast to 10.5 percent.
The growth forecast was lower than the
6.0 percent projected in April. The multilateral lender also downgraded the
growth forecast from 6.2 percent to 4.7 percent, according to its latest report
the Asian Development Outlook 2008 Update.
ADB cited the combination of high
food and oil prices as the main forces to push up inflation and undermine
consumer spending.
"Two of the economy's main growth drivers, private
consumption on the demand side and services on the production side, have lost
momentum," the report said.
It said growth in household spending, recorded at
6 percent for 2007, eased to 5.2 percent in the first quarter, and slowed to 3.4
percent in the April-June quarter as inflation worsened.
The financial
services, retail trading, and transport and communications sectors have all been
hit by the drop in consumer spending, the report said.
The Philippines, which
buys most of its fuel demands from abroad and has become the world's largest
rice importer, is one of the Southeast Asian countries worst hit by inflation in
2008. Consumer prices grew 12.5 percent in August year-on-year, hitting a
17-year high but already showing signs of moderation.
The central bank has
twice revised its inflation projection of the year from 3-5 percent to currently
9-11 percent.
ADB said it had raised the country's round-year inflation
forecast from 4 percent to 10.5 percent, and the inflation is predicted to
further ease to 8 percent in 2009.
Contrast to the continuous expanding
overseas work deployment of the Philippines, ADB also warned the uptrend of
worsening employment situation at home as latest government data showed the
unemployed and the underemployed accounted for 28.4 percent of the country's
34.6 million labor force.
"Employment creation remains insufficient despite
several years of above 5 percent economic growth. A lack of productive
employment opportunities within the country is one reason that a rising number
of Filipinos work abroad," the report said.
Xinhua
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