AMRO slashes Philippine economic outlook, inflation forecast revised higher

The ASEAN+3 Macroeconomic Research (AMRO) on Thursday slashed its Philippine economic growth outlook for this year and the next, while upgrading its 2021 inflation forecast above the government target range.

Based on the latest ASEAN+3 Regional Economic Outlook (AREO), AMRO now expects the Philippine economy to grow by 4.3% this year, slower than the 6.9% it predicted in the March AREO, and the 6.4% in June.

It also downgraded its economic outlook for 2022 to 6.7% from the 7.8% in March.

“The realization of downside risks foreshadowed in March—mainly in the form of disruptions caused by the COVID-19 delta variant—has resulted in downward revisions to AMRO staff’s ASEAN+3 growth forecasts for this year,” AMRO said in the latest report.

The Philippines earlier recorded a surge in the number of daily COVID-19 cases due to the delta variant, but officials are optimistic that the latest figures are indicating a downtrend.

The health department on Wednesday, October 6, reported 9,868 new confirmed cases of COVID-19, bringing the country’s active cases to 112,807. The total caseload stands at 2,622,917 which includes 2,471,282 recoveries and 38,828 deaths.

Regional economic growth is now predicted at 6.1% this year, lower than the 6.7% forecasted earlier, and the flat growth in 2020.

“The region is adapting and learning to function within the more uncertain environment,” AMRO said.

“The pandemic has altered the way businesses and consumers transact, accelerated digitalization, and led the emergence of new business models and types of firms. Rising protection and immunity are also allowing some resumption of travel,” it added.

In the latest report, AMRO also revised its inflation outlook for the year to 4.3% from 3.3% in March. This is higher than the central bank’s 2% to 4% target range, but lower than its 4.4% forecast for the year.

Inflation clocked in at 4.8% in September, the second straight month that the target range was breached. So far this year, July was the only month when inflation fell within the target range, at 4.0%.

For 2022, AMRO expects inflation to ease to 3.2%, slower than its earlier forecast of 3.3%. The central bank also expects inflation at 3.3% next year, and 3.2% in 2023.—AOL, GMA News