In the Philippines, recovery in exports and expanded private consumption and investment generated gross domestic product (GDP) growth of 6.0% in the first half of 2014. Government expenditure decelerated sharply and public construction fell, partly reflecting cautious spending by government agencies amid concerns over the misuse of government funds.
|Selected Economic Indicators (%) - Philippines||2014||2015|
|ADO 2014||Update||ADO 2014||Update|
|Current Account Balance (share of GDP)||3.4||3.2||3.2||2.8|
Source: ADB estimates.
Slightly stronger economic growth is projected through the rest of this year and in 2015 on expectations that post-typhoon reconstruction accelerates, government fiscal disbursement improves, and exports benefit from brighter prospects in the major industrial economies. Nevertheless, growth forecasts are trimmed since April owing to the unexpectedly low government spending coupled with higher inflation and associated monetary tightening.
Inflation accelerated to 4.9% in August as the impact of typhoons on food supplies pushed up prices. Rising inflation and strong growth in liquidity prompted the monetary authorities to raise policy interest rates in July and again in September, and to increase reserve requirements for banks. Inflation is now projected at 4.4% this year, the highest in 3 years, and the forecast for 2015 is also edged up.
Higher remittances from overseas Filipinos together with increases in exports of goods and services will underpin current account surpluses this year and next. However, the current account forecasts are trimmed since April as imports are projected to rise significantly when reconstruction speeds up.
Source: ADB. 2014. Asian Development Outlook 2014 Update. Manila.