Metro Manila (CNN Philippines) — The Asian Development Bank (ADB) has trimmed its 2015 growth forecast for the Philippine economy to 6.0 percent from 6.4 percent last March. Should the economy grow at the rate, it will be the slowest full year growth since 2011’s 3.7 percent.
Lackluster exports and agricultural production, coupled with dismal public spending, prompted the bank to update its 2015 Asian Development Outlook on Tuesday (September 22).
The move comes after the economy registered slower annualized growth figures during the first two quarters of the year. However, the institution retained its 6.3 percent growth forecast for 2016.
According to government figures, the GDP grew by 5.0 percent during the first quarter of the year and 5.2 percent the next. However, ADB Country Director for the Philippines Richard Bolt expects the economy to pick up pace for the rest of the year.
“After a slow start to the year we are now seeing a pickup in fiscal spending which combined with spending linked to the May 2016 elections will help lift the domestic economy.”
He added that growth could be driven by greater investments in public goods and infrastructure, robust private consumption, and more jobs.
“Recently enacted reforms to improve competitiveness and to attract investment will play a key role in future growth, as will continued reforms and investments in infrastructure and other public goods.”
For his part, University of the Philippines School of Economics professor Emeritus Ernesto Pernia said that sluggish growth from slow public expenditure and a weak agriculture sector hurts the poor and makes economic gains less inclusive.
“Any reduction in economic growth rate always has an effect on poverty… That would imply that the poor are not benefiting much from the change in economic growth.”
The ADB identified he El Niño weather phenomena and slower than expected economic growth in the major industrial economies and China as risks to their outlook.
CNN Philippines’ Miro Capili contributed to this report.
