The Asian Development Bank (ADB) said Tuesday that the growth of Philippine economy this year may be tempered by higher inflation and interest rates. In its latest report titled "Asian Development Outlook 2014," the Manila-based lender projected Philippine economic growth to hit 6.4 percent in 2014, lower than the government's target of 6.5 to 7.5 percent. For the next year, ADB forecasts Philippine gross domestic product (GDP) growth to reach 6.7 percent, which is also lower than the 7 to 8 percent target set by the government. "While private consumption will continue to benefit from remittance inflows and positive consumer sentiment this year, higher inflation and interest rates will likely moderate the peace of growth in consumer spending," the ADB report read. The Philippine central bank said earlier that inflation in 2014 may average 4.2 percent, higher than the 3 percent posted last year. Also, the report noted that rehabilitation and reconstruction in areas hit by natural disasters in 2013 may not have a significant impact on the country's economy until late in 2014 and 2015. ADB said the good performance of manufacturing and the business process outsourcing sectors will buoy GDP this year. Government spending for infrastructure will also boost economic growth in 2014. Despite the destruction wrought by natural disasters such as the magnitude 7.2 earthquake and typhoon Haiyan (local name: Yolanda), the Philippines managed to post a GDP growth of 7.2 percent in 2013. ADB said this is above the average economic growth of 4.7 percent in the years 2008 to 2012. "While growth is forecast to slow from a very strong 2013, the economy will continue delivering well above its recent average growth rate this year. The key challenge is to find ways to turn this strong performance into employment that will help to further reduce poverty and support inclusive growth," said ADB's Deputy Chief Economist Juzhong Zhuang. Government data show nearly 3 million Filipinos are unemployed and an additional 7 million are underemployed.