MANILA, PHILIPPINES (14 December 2021) — The Philippine economy is forecast to remain on a steady growth path in 2021 and 2022, supported by an acceleration in the government’s coronavirus disease (COVID-19) vaccination program and a sharp drop in COVID-19 cases, according to a report released today by the Asian Development Bank (ADB).
The supplement to the Asian Development Outlook (ADO) 2021 says the Philippine economy will grow 5.1% in 2021 and 6.0% in 2022, up from the bank’s September forecast of 4.5% in 2021 and 5.5% in 2022.
“The Philippine economy has shown impressive resilience,” said ADB Philippines Country Director Kelly Bird. “Growth momentum has clearly picked up on the back of the government’s vigorous drive to vaccinate Filipinos against the COVID-19 virus. Public spending on infrastructure and continued vaccination of the population will help the country further accelerate its recovery in 2022.”
The inflation outlook for 2021 and 2022 is 4.4% and 3.7%, respectively, mainly due to rising fuel prices. These are up from ADB’s September forecast of 4.1% in 2021 and 3.5% for 2022.
Vaccination has allowed the economy to slowly reopen, boosting consumer and business confidence. More than 57 million Filipinos, or nearly 65% of the target for vaccination, had received at least one COVID-19 vaccine dose as of 8 December 2021. In addition to the government’s purchases of COVID-19 vaccines, the World Health Organization-supported COVID-19 Vaccines Global Access (COVAX) facility also donated supply for the country’s nationwide vaccination program.
ADB has been assisting the government in procuring COVID-19 vaccines. It provided $425 million in total financing through the Health System Enhancement to Address and Limit COVID-19 under the Asia Pacific Vaccine Access Facility (HEAL) and HEAL2 programs. These loans helped fund nearly half of the country’s vaccine supply purchases for 2021. On 13 December 2021, ADB approved $250 million in additional financing under HEAL 2 to help the government procure more COVID-19 vaccines for minors and booster shots for adults.
Public spending on major infrastructure projects will support the country’s economic growth. ADB has been supporting the government’s “Build, Build, Build” infrastructure development program, which seeks to boost investments on roads, bridges, and railways to fuel faster growth, especially in areas outside the capital Metro Manila.
ADB’s current investments in the country’s flagship projects include the Malolos Clark Railway Project, EDSA Greenways Project, and the Angat Water Transmission Improvement Project. The bank is preparing a $175 million loan to assist the government in building climate- and disaster-resilient bridges to improve road traffic flow in Metro Manila.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.