Strong, inclusive growth is projected to speed up the pace of poverty reduction
MANILA, April 11, 2017 – The Philippines is likely to grow close to 7 percent in the next two to three years, and will remain a top performer in the East Asia and Pacific Region, according to the World Bank Philippines Economic Update released today.
“Strong growth in recent years has been accompanied by job creation and a declining number of people living in extreme poverty,” said World Bank Country Director Mara K. Warwick. “That means growth is becoming more inclusive.”
The Philippine economy is projected to grow 6.9 percent in 2017 and 2018, and 6.8 percent in 2019.
The government’s commitment to further increasing public infrastructure investment is expected to sustain the country’s growth momentum through 2018 and reinforce business and consumer confidence.
“The implementation of planned infrastructure projects could generate positive spillover effects for the rest of the economy, spurring additional business activity, accelerating job creation, and ultimately contributing to higher household consumption and poverty reduction. “ said Birgit Hansl, World Bank Lead Economist.
The poverty incidence among Filipinos already dropped to 21.6 percent in 2015 from 25.2 percent in 2012 which means 1.8 million Filipinos were lifted out of poverty within three years.
Higher employment, low inflation and improved incomes contributed to the decline in the number of poor people.
The report also noted that sustaining the inclusive pattern of recent growth will require an enduring commitment to structural reforms that facilitate private investment.
This can be achieved by promoting greater competition, removing restrictions to investments from other countries, simplifying business regulations, and protecting property rights which continue to discourage private investment.
“Underinvestment contributes to high rates of informality and low job quality, and it weakens the impact of employment growth on poverty reduction,” according to Hansl.
The World Bank also underscored that the newly completed Philippine Development Plan or PDP (2017-2022) strives to address many of these policy challenges.
Implementation of the government’s articulated commitments will allow the Philippines to leverage over the medium-term a number of development opportunities, including the potential for a demographic dividend and using the rapidly growing services sector to increase domestic value addition and accelerate the creation of high-quality jobs.