Metro Manila (CNN Philippines, April 4) — The Asian Development Bank (ADB) expects the Philippine economy to keep its “healthy expansion mode” this year albeit at a slower pace compared to 2022, its new report showed Tuesday.

In its Asian Development Outlook April 2023 forecasts, the ADB maintained its growth forecast for the Philippines at 6% in 2023, with high domestic demand and the rebound in services, particularly tourism, propping up the growth. The figure is weaker against the 7.6% expansion witnessed last year.

The Marcos administration, meanwhile, expects the economy to grow by 6% to 7% this year.

“The Philippines will grow at its potential this year and next and is on track toward its goal to become an upper middle-income country,” ADB Philippines Country Director Kelly Bird was quoted as saying in a statement.

According to Bird, the Philippines would be “increasingly challenged” by climate change and technological advancement in the labor market.

“Key to sustaining a strong growth momentum is keeping public infrastructure spending at levels above 5.0% of GDP, as the government has planned for this year and in the medium term," he said.

"High-impact infrastructure projects that will help connect communities to markets and public services and provide access to jobs and livelihood will help increase rural incomes and support inclusive growth,” Bird added.

Better expansion is seen by 2024 at 6.2%.

However, the sharp slowdown in major economies, geopolitical tensions, and soaring inflation pose threats to growth, the ADB noted.

By the second half of this year, ADB said Filipino consumers might realize a relief in prices as the central bank’s aggressive interest rate hikes take effect, while global commodity prices also cool down.

For this year, the Bangko Sentral ng Pilipinas expects inflation to average above the upper end of the target range at 6%.