THE World Bank expects the Philippine economy to grow by an average 6.8 percent in the next three years amid heavy infrastructure and consumer spending, and strong remittances and services exports.
“In the Philippines, growth is projected to accelerate to 6.8 percent on average in 2017-19, supported by ongoing infrastructure projects, strong consumption, buoyant inflows of remittances, and strong revenue from services exports,” the Washington-based lender said in its Global Economic Prospects report released Wednesday,
It forecasted Philippine gross domestic product (GDP) to grow by 6.9 percent this year from an estimated 6.8 percent last year. For 2018, the World Bank said the economy could expand by 7 percent before moderating to 6.7 percent in 2019.
The government’s GDP target growth range this year is 6.5 percent to 7.5 percent. For 2018 and 2019, it targets GDP growth to be within 7 percent to 8 percent.
The government plans to hike the country’s infrastructure budget – combining national and local projects – to increase to P1.898 trillion by 2022 from P861 billion in 2017, or to about 7 percent of GDP from 5.4 percent.
Asia to ease
Growth in the East Asia and Pacific region was projected to ease to 6.2 percent in 2017 from an estimated 6.3 percent in 2016 as China slows and the rest of the region picks up.
Output in China is anticipated to slow to 6.5 percent in the year from 6.7 percent in 2016. Macroeconomic policies are expected to support key domestic drivers of growth despite softness of external demand and overcapacity in some sectors. Excluding China, growth in the region will accelerate at a more rapid 5 percent rate in 2017, the World Bank said.
The multilateral institution said risks have tilted further to the downside since mid-2016, including heightened policy uncertainty in advanced economies (Europe and the United States) amid a rise in support for trade protection.
It said financial market disruption and weak growth in advanced economies would pose further risks to growth.
Rising political opposition to trade contributed to a post-crisis high in new trade restrictions in the past year, and the imposition of trade barriers by major trading partners will disproportionately affect the relatively more open economies of East Asia and Pacific, it said.
Stronger global prospects
The World Bank also said that an unexpected deceleration of major economies in the region or weaker-than-expected global trade would dampen growth in the region, and a faster-than-expected slowdown in China would have sizable regional spillovers.
An adverse reaction to the US Federal Reserve’s anticipated rise in interest rates or an increase in global risk aversion may also slow growth, it said.
Globally, economic growth is projected to accelerate moderately to 2.7 percent in 2017 after a post-crisis low estimated at 2.3 percent last year, as obstacles to economic activity recede among emerging-market and developing-economy commodity exporters, while domestic demand remains solid among emerging and developing commodity importers.
“After years of disappointing global growth, we are encouraged to see stronger economic prospects on the horizon,” World Bank Group President Jim Yong Kim said in a statement.
“Now is the time to take advantage of this momentum and increase investments in infrastructure and people. This is vital to accelerating the sustainable and inclusive economic growth required to end extreme poverty,” he added.