The Philippine economy will likely repeat last year’s growth pace before picking up in 2019, the International Monetary Fund (IMF) said.
In the April edition of its “World Economic Outlook”, the IMF retained its 2018 gross domestic product (GDP) growth forecast at 6.7 percent and said the figure could rise to 6.8 percent next year.
The estimates fall below the government’s 7.0-8.0 percent target for both years. Growth in 2017 was 6.7 percent, within the 6.5-7.5 percent goal.
Solid domestic demand and public investment will drive the expansion, IMF Resident Representative Yongzheng Yang said in an email, adding that “as you may know, these growth forecasts are among the highest in the Asia-Pacific region.”
“The strong global growth will also provide a favorable external environment for the Philippines’s export growth, OFW (overseas Filipino worker) remittances, and BPOs (business process outsourcing firms),” he continued.
Merchandise exports were up 0.5 percent to $8.536 billion at the start of the year based on latest data. Personal remittances, meanwhile, totaled $2.528 billion for February, bringing the year-to-date tally to $5.182 billion.
“Strong domestic reform momentum, including in the area of taxation and capital market development, bodes well for private sector investment, including FDI (foreign direct investments),” Yang said.
Net foreign direct investments hit a two-month high of $919 million in January.
“Main risks to this growth outlook stem from tighter global financial conditions, trade tensions among major economies, and geopolitical events,” Yang said.
Nevertheless, he said “the Philippines is in a strong position to manage shocks to its economy as it has ample foreign reserves and a low level of public debt.”
The country’s gross international reserves fell to its lowest level in more than three years in March, with the $80.127 billion enough for 7.9 months worth of imports. The national government’s outstanding debt, meanwhile, rose to P6.82 trillion in February.