Philippine
economic growth would outperform those of its peers in the region this year on
the back of robust domestic demand despite a weak global economy, according to
the World Bank.
“Among
the large developing Asean economies, Vietnam and the Philippines have the
strongest growth prospects. In the Philippines, growth is projected to firm to
6.4 percent in 2016, with an accelerated implementation of public-private
partnership projects and strong domestic demand. The country benefits from
diversified export markets and low global commodity prices,” the World Bank
said in its June 2016 Global Economic Prospects report released Wednesday in
Manila.
The
Washington-based multilateral lender kept its forecasts in April of a
6.4-percent gross domestic product (GDP) growth for the Philippines in 2016 and
6.2 percent in 2017 and 2018.
The World
Bank’s growth projection for this year, however, was below the government’s
6.8-7.8 percent target range. Economic managers had said the lower end of the
2016 GDP growth goal was attainable given the faster-than-expected 6.9- percent
expansion in the first quarter.
In the
next two years, the Philippine economy would further grow on expectations of
sustained low commodity prices and strong consumption, the World Bank said.
The World
Bank noted that in recent years, economic growth in the country was being
“bolstered by steady inflows of remittances and trade in services.”
Amid slow
global trade, “strong domestic demand underlay growth in commodity importers”
in the Philippines, the World Bank said.
The World
Bank also noted of the country’s improved macroeconomic fundamentals. For one,
“tighter macro-prudential policies in several of the larger regional economies
(Malaysia, Thailand and the Philippines) have already resulted in moderating
credit growth.”
Also, the
World Bank cited higher revenue generation in recent years. “In the
Philippines, fiscal deficits for the general government narrowed significantly,
from 3.5 percent of GDP in 2010 to just under 1 percent in 2015, helped by
strong revenue collection through faster growth and improved tax
administration.”
The World
Bank urged Asean countries, including the Philippines, to establish fiscal
policy measures “within a medium-term framework to create fiscal space and improve
public expenditure efficiency.”
“This can
be achieved through improved revenue mobilization (in Cambodia, Indonesia, Laos
and the Philippines), reduced dependence on fiscal revenue from energy sectors
(in Malaysia, Mongolia and Papua New Guinea), and increased and more efficient
investment (in Indonesia, the Philippines and Thailand),” the World Bank said.
The
lender also urged the Philippines to tap the growth potentials being presented
by its young population.
Ben O. de
Vera
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