Despite lower growth expectations from the World Bank, the economic expansion of the Philippines will continue to outpace that of China and its Asean-5 neighbors until 2020, according to its latest report.
National Economic and Development Authority (Neda) Undersecretary Rosemarie G. Edillon, however, expressed confidence that the Philippines is on track to achieve its development targets by 2022.
In its Global Economic Prospects report, the Washington-based lender projected that the Philippines’s GDP would grow 6.7 percent until 2019 and 6.5 percent in 2020.
Only Vietnam is expected to match the Philippines’s economic growth of 6.5 percent in 2020.
“The Philippines will continue to be the fastest-growing economy in the Asean, despite some stabilization of investment growth,” the World Bank said. These projections are below the country’s 7 percent to 8 percent GDP growth targets between 2018 and 2022. The bank’s forecast for 2017 is within the government’s 6.5 percent to 7.5-percent growth target.
The government aims to increase GDP by 7 percent to 8 percent every year starting this year until 2022. These growth targets were included in the Philippine Development Plan (PDP) to help attain AmBisyon2040 and even the country’s commitment to meet the Sustainable Development Goals by 2030.
“The World Bank probably considered our current capacity to grow. But that is exactly what the PDP lays out—strategies to increase physical capacity, improve quality of human capital and reduce unnecessary regulatory burden,” Edillon told BusinessMirror. “The policy-reform agenda is especially important.”
The World Bank said risks to the growth outlook remain on the downside. An abrupt tightening of global financing conditions could derail growth. Further, escalating trade restrictions and rising geopolitical tensions could dampen confidence and activity.
However, stronger-than-anticipated growth could also materialize in several large economies, further extending the global upturn.
“With unemployment rates returning to precrisis levels and the economic picture brighter in advanced economies and the developing world alike, policy-makers will need to consider new approaches to sustain the growth momentum,” said World Bank Development Economics Prospects Director Ayhan Kose. “Specifically, productivity-enhancing reforms have become urgent as the pressures on potential growth from aging populations intensify.” Growth in emerging markets and developing economies as a whole is projected to strengthen to 4.5 percent in 2018, as activity in commodity exporters continues to recover.
In advanced economies, growth is expected to moderate slightly to 2.2 percent in 2018, as central banks gradually remove their postcrisis accommodation and as an upturn in investment levels off.
“The broad-based recovery in global growth is encouraging, but this is no time for complacency,” World Bank Group President Jim Yong-kim said. “This is a great opportunity to invest in human and physical capital. If policy- makers around the world focus on these key investments, they can increase their countries’ productivity, boost work-force participation and move closer to the goals of ending extreme poverty and boosting shared prosperity.”
By Cai Ordinario
