Growth forecast close to 7 percent in the next three years
The World Bank on Tuesday, April 11 says the Philippine economy will grow close to 7 percent in the next three years, remaining the top performer in East Asia.
In its report, the bank retained its 6.9 percent economic growth forecast for the Philippines this year, and is likely to sustain the same growth rate in 2018 — which is down from its December projection of 7 percent.
The bank also projected the domestic economy to slightly ease to 6.8 percent in 2019.
However, World Bank lead economist for the Philippines Birgit Hansl downplayed the downward adjustment in the 2018 growth forecast.
“The revisions from the forecast in December is minor. Statistically, it’s insignificant. It’s just that we have more information now than last year,” Hansl said. “So as you can see, there is no major change. On the opposite, we see it as positive development.”
Taking note of the expected increase in the government’s infrastructure spending, Hansl said the World Bank “continues to have a positive economic outlook for the Philippines that will be sustained throughout 2018.”
“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,” she further added.
Citing higher employment, low inflation and improved incomes, the World Bank also said in its report that the poverty rate in the Philippines fell down from 25.2 percent to 21.6 percent in 2015.
This is likely equivalent to the 1.8 million Filipinos who have been lifted out of poverty within three years.
Likewise, the unemployment rate fell to 4.7 percent in 2016 with 1.4 million jobs created. Hansl, however, made note that the underemployment rate remains high at 18 percent.
“Underinvestment contributes to high rates of informality and low job quality, and it weakens the impact of employment growth on poverty reduction,” Hansl said.