The report from Asian Development Bank forecasted the Philipines economy growth by 4.5% in 2021 and 5.5% in 2022. Consumer and business trust would be restored as a result of significant progress in the country’s vaccine rollout, though concerns about how the pandemic would play out globally and domestically may jeopardize growth prospects.
“Our 4.5% growth forecast is at the lower end of economists’ estimates, so there are upsides to this projection,” said ADB Philippines Country Director Kelly Bird. “Priority should be given to addressing the scarring effects of the pandemic on private sector employment. Programs supporting workers and firms impacted by labor market adjustments and reforms to boost productivity growth and investment will help counter the negative effects of the pandemic on employment over the medium term.”
The government’s expansionary fiscal program and accommodative monetary policy will put the economy on a solid recovery path by the second half of 2021. According to the report, the government’s plans to improve labor market initiatives and assist in the recovery of pandemic-affected sectors such as agriculture and tourism will help the economy recover even faster.
Due to rising global commodity prices and other supply-side factors, inflation is expected to rise to 4.1% in 2021, up from 2.6% in 2020. However, it is expected to ease to 3.5% in 2022 as the government takes measures to address supply-side pressures.