by: Sarah Joson
Thursday, June 9, 2016 |
Even if global growth is expected to slow down, the World Bank expects the Philippines to withstand external risks as it is backed by robust domestic demand and strong influx of funds from overseas Filipino workers.
According to Budget Secretary Florencio B. Abad, he sees further expansion this quarter, fuelled by election-related spending. He sees greater expansion this quarter than the first three months’ 6.9% growth because of bigger public and private spending prior to the national election.
World Bank recently released its June Global Prospects report which revealed its 6.4% growth forecast for the Philippines - a slower figure compared to the government’s 2016 target of 6.8-7.8%. These projections allow the country to be one of the leading economies in Asia-Pacific and the world in terms of growth against weakening global growth prospects.
The multilateral lender anticipates the Philippines to post a growth rate of 6.2% for the next two years. On the other hand, the government expects 6.6-7.6% for 2017 and 7-8% for 2018.
As for global growth, the World Bank cut its forecast from 2.9% to 2.4% for this year and 3.1% to 2.8% for next year because of “significant” downgrades in the forecast for export-led nations. Moreover, “heightened domestic uncertainties” and “a more challenging external environment” are expected to disrupt global growth. However, it is expected to gain traction in 2018 with a forecast of 3.0%.
The report also revealed that countries in East Asia and the Pacific are seen to keep in line with the initial 6.3% this year and at 6.2% by 2017 released in January. Moreover, it denoted that strong domestic demand is said to be the key driver of growth amongst the commodity importers in the Philippines, Vietnam, and Thailand.
Furthermore, the report highlighted that the Philippines and Vietnam have the strongest growth prospects within the large developing economies in the ASEAN (Association of Southeast Asian Nations). Growth is expected to register at 6.4% this year, with a faster implementation of public-private partnership projects and strong domestic demand.