The Asian Development Bank (ADB) has reduced the inflation outlook for the Philippines this year, while maintaining gross domestic product (GDP) growth projection for 2024 and 2025.

In its Asian Development Outlook (ADO) December 2024 report released Wednesday, ADB revised to 3.3 percent its inflation rate forecast for the Philippines this year, down from 3.6 percent in the ADO issued last September.

The report attributed the revision to the government’s move to reduce tariffs on imported rice, which helped in taming the increase of food prices.

Food inflation last month stood at 3.5 percent, while the 11-month average stood at 4.6 percent.

“Inflation is expected to remain within the central bank’s 2 to 4 percent target, providing scope for further monetary policy easing. Policy rates were cut by a total of 50 basis points in August and October 2024,” the ADO report reads.

Inflation outlook for 2025 remained at 3.2 percent.

Likewise, the ADB maintained its GDP projection for the domestic economy for this and next year at 6 and 6.2 percent, respectively.

“Moderating inflation and monetary policy easing should continue to support growth,” it said.

“On the supply side, buoyant services sector, construction, and manufacturing are contributing to overall growth. Services will continue to be the dominant growth driver, with retail trade, tourism, and information technology–business process outsourcing as major contributors,” the report said.

The improvement in the local manufacturing purchasing managers’ index (PMI), which stood at 53.8 in November — the highest in over two years — is also expected to support economic growth this year.

“Public infrastructure projects continue to lift growth, along with brisk private construction,” the report added.