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According to a report released Wednesday by the Asian Development Bank, sustained growth in public infrastructure spending, improved consumer confidence, and progress in the national coronavirus disease 2019 (Covid-19) vaccination program will support the Philippines’ economic growth in 2021 and 2022. (ADB).

In its Asian Development Outlook (ADO) 2021 Update, the Asian Development Bank reaffirmed its estimate for the country’s GDP growth of 4.5 percent in 2021 and 5.5 percent in 2022.

The study highlighted indications of the country’s economy gradually recovering, with an uptick in domestic demand and positive foreign trends aligning with the ADO’s April forecasts.

The greatest threat to the prognosis is the development of newer, more infectious Covid-19 strains, which may lead to tighter containment measures and a halt in economic activity.

“The economy has recovered its footing and is heading in the right direction.” “However, owing to the danger presented by more contagious Covid-19 strains, the recovery remains fragile,” stated ADB Philippines Country Director Kelly Bird. “Vaccination will be critical to the economy’s safe reopening.” Through our health-related assistance, we are actively supporting the government’s efforts to meet its national immunization goals.”

The government has concentrated its efforts on vaccinating Filipinos in major metropolitan areas, such as Metro Manila, which has the highest rate of Covid-19 infections.

As of Sept. 15, 84 percent of Metro Manila citizens aged 18 and above, or 8.2 million individuals, have gotten at least one dose of the Covid-19 vaccine, with 63 percent having received the whole vaccine.

As of mid-September, 22 million individuals had got their first vaccination and 17.7 million had been completely immunized throughout the country.

In July, public infrastructure expenditures increased 39.1% year over year, putting the government on pace to meet its goal of increasing infrastructure spending to at least 5% of GDP in 2021 and 2022, up from 4.8 percent in 2020.

The government’s policy changes and the expansionary fiscal program will help the economy recover, with a fiscal deficit of 7.5 percent of GDP anticipated in 2022, according to the study.

The government’s National Employment Recovery Strategy, which was approved in June 2021, focuses on the recovery of high-quality employment, worker upskilling, social protection expansion, and active labor market initiatives.

Proposed legislation to enhance the investment environment is one of the government’s top policy reform priorities.

According to the ADO Update, inflation projections remain constant at 4.1 percent in 2021 and 3.5 percent the following year.

The government’s monetary policy stance is anticipated to remain accommodating, with inflation forecast to fall back within the central bank’s target range of 2% to 4% and a gradual rebound in domestic demand.

With a stronger-than-expected recovery in imports, particularly capital goods and raw materials, the country’s current account surplus would shrink to a revised 1% of GDP this year and 0.8 percent in 2022, according to the study.

The current account will be helped by an increase in goods exports, as well as revenues from business process outsourcing and increased remittances from Filipinos living abroad.

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