by: Sarah Joson
Wednesday, May 4, 2016 |
The International Monetary Fund (IMF) recently released a report “Regional Economic Outlook for Asia and the Pacific” where it was revealed that the Philippines is expected to be the fastest-growing economy in the Southeast Asian region this year and in 2017.
The gross domestic product (GDP) of the Philippines is expected to reach 6% this year, and 6.2% for next year. These figures are the highest in the ASEAN-5 wherein 4.9% and 5.3% are predicted for Indonesia; 4.4% and 4.8% for Malaysia; Thailand with 3% and 3.2%; and Singapore with 1.8% and 2.2%.
The report also identified the strong domestic demand which continues to drive growth and will offset the imbalance from a probable slowdown in net exports. Challenges spurring from net exports will remain minimal, and the risks brought on by spillovers from China will not be as much in the Philippines compared to other parts of the region.
Moreover, IMF explained that domestic demand can be fuelled by higher government spending and investment growth. On the other hand, private demand is buoyed by the country’s low unemployment rate, low oil prices, and influx of remittances from overseas Filipino workers.
Private investment growth is anticipated to sustain momentum due to improvements in public infrastructure and implementation of public-private partnership projects.
Comparing to the government’s initial forecast of 6.8-7.8% for this year, and 6.6-7.6% for 2017, the IMF’s projections are lower. The country’s 5.8% GDP last year was lower than the 6.1% recorded in 2014.
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