The Philippine economy is expected to expand by 6.8 per cent this year — which would be the tenth highest growth rate in the world.
In a report issued today (Saturday, July 1), the World Bank attributed the country’s expected growth to strong exports, high private consumption and robust remittance flows.
The forecast was only slightly lower than a 6.9 per cent growth rate projected in April.
“In the medium-term, supporting higher investment levels will be critical to sustain the economy’s growth momentum,” said Birgit Hansl, World Bank Lead Economist for the Philippines.
“The government’s ability to realise its infrastructure spending agenda will determine if the Philippines can achieve the growth target of 6.5-7.5 percent for 2017,” he said.
The World Bank maintained its 6.9 percent growth forecast for 2018.
The projected growth comfortably outstrips that of its neighbours, including China (6.6 per cent), Vietnam (6.5), Indonesia (5.1), Malaysia (4.5), Thailand (3), Singapore (2.2) and Taiwan (1.7).
London-based research firm IHS Markit shared the World Bank’s optimism. “The Duterte administration’s latest economic dashboard is flashing a healthy green,” said Rajiv Biswas, chief economist for the Asia-Pacific region.
Biswas said that growth in the first quarter of 2017 as measured by the gross domestic product (GDP) was 6.4 percent year-on-year while exports surged 18.5 per cent year-on-year.
“After one year under the Duterte administration, the Philippines economy is continuing to perform strongly, with GDP growth forecast by IHS Markit to be 6.4 percent in 2017 and 6.3 percent in 2018, maintaining the high-growth trajectory that has been recorded since 2012.”
Under the banners of “Build, Build, Build” and “Dutertenomics” the government recently launched an ambitious eight trillion peso infrastructure development plan covering 75 major projects that are expected to generate two million jobs annually.
World Bank data showed private consumption is expected to grow at 5.6 per cent, a rise seen to be sustained by high remittance flows from overseas workers. Remittances increased by eight per cent in the first quarter of 2017, a five-point jump from three per cent in the same period last year.
Steady economic growth is expected to “lead to increased job opportunities, and sustained economic expansion has already begun to contribute to increasing incomes across all income groups” the bank said.
The organisation also said that between 2012 and 2015, “household income among the bottom 40 per cent of the income distribution rose by an average annual rate of 7.6 percent”.
Demand for Philippine exports is expected to increase as the economies of Manila’s main trading partners are also experiencing “robust growth”.
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