THE Asian Development Bank (ADB) said that monetary conditions are now more favorable with the taming of inflation, which pushed food prices higher in the Philippines in 2018, and added that support for key water projects and the Malolos-Clark railway are its priorities for the country in 2019.
“Monetary conditions are more favorable today because of the inflation rate,” Takehiko Nakao, ADB President, said in a forum on Thursday.
“Inflation is now more controlled in many countries including in India and the Philippines, so there’s more room for monetary policy (action). Monetary policy should be prepared responsibly for future challenges,” Mr. Nakao said.
The Bangko Sentral ng Pilipinas (BSP) projects headline inflation to average 3.1% in 2019.
For Developing Asia, the ADB projects a growth rate of 5.7% in 2019 and 5.6% in 2020. For the Philippines, the ADB is expecting the economy to grow by 6.4% both this year and in 2020, up 0.2 percentage points from the 6.2% recorded in 2018.
“The Philippine economy is growing at a solid pace. Inflation is coming down. There is more space for monetary policy… Poverty reduction is ongoing. It is high, still, but there is progress,” Mr. Nakao said.
According to Mr. Nakao, the ADB is increasing its lending to the Philippines this year, prioritizing the Angat Water Transmission Improvement Project, citing the need for water supply to support urban and agriculture development.
The Angat Dam Transmission Improvement Project began in 2016, and Mr. Nakao said that ADB will continue the project this year.
“We are increasing our lending to the Philippines. This year we expect new lending to the Philippines to be $3 billion including the Malolos Clark Railway project… There are many important projects — one is the Angat Water Transmission Improvement Project. This is an addition to the previous project. So we will support water for Manila,” Mr. Nakao said.
“We are looking at rural development and food security so there is no starvation and there is good nutrition. In the Philippines, we do not have direct agriculture support but we have rural development,” Mr. Nakao added.
Kelly Bird, ADB Philippines Country Director, said the bank wants to focus on Mindanao where there is high poverty, but offers opportunities for agribusiness.
“When we were in the process of crafting the country business plan, we discussed with the government how we can support agricultural development, so what we are looking at is an irrigation project for 2021,” Mr. Bird said.
“We will be focusing on Mindanao where there is agribusiness, and poverty rate is quite high. So we are looking at those two projects, irrigation and flood protection projects,” Mr. Bird added. — Reicelene Joy N. Ignacio