The World Bank has maintained the Philippines would grow by 6.4 per cent, allowing it to remain one of the fastest-growing economies in Asia Pacific even as most of the world has economically slowed down.
The Philippines is expected to remain resilient to external headwinds on account of its narrow budget gap and steady inflows from remittances and trade in services, as well as robust domestic spending.
This bullish assessment on the Philippines is contained in the June Gobal Economic Prospects report released recently by the international lending agency.
The forecast is, however, lower than the 6.8 to7.8% target by the Philippine government for 2016.
For the next two years, the World Bank expects the Philippines to grow 6.2% annually, against the government’s 6.6-7.6% and 7-8% targets for 2017 and 2018, respectively.
The World Bank slashed its forecast for global growth to 2.4% for 2016 and to 2.8% in 2017 — compared to the 2.9% and 3.1% projections given last January — due to “significant” downgrades in the forecast for export-oriented economies, factoring in “heightened domestic uncertainties” and “a more challenging external environment.”
Global growth, the WB report said, is expected to pick up to 3.0% in 2018.
In contrast, countries in East Asia and the Pacific are expected to still grow by 6.3% this year and at 6.2% by 2017, steady from the January estimates. In 2018, this region is projected to grow slower at 6.1%.
In an interview with Business World, outgoing Budget Secretary Florencio Abad expressed confidence there would even be more robust expansion in the first quarter of 2016, given bigger government and private spending ahead of the May 9 elections.
“Many of the problems we encountered before in budget execution are being addressed already and the efficiency of our procurement system has also dramatically improved you have that, and I think the impact of election spending is going to be more heightened in the second quarter,” Abad said.