By Elijah Joseph C. Tubayan
THE PHILIPPINES can be expected to remain one of Southeast Asia’s fastest-growing economies, the World Bank said in its latest report, even as the global lender maintained the country’s growth projection for this year.
“The Philippines will continue to be the fastest-growing economy in the Association of Southeast Asian Nations (ASEAN), despite some stabilization of investment growth,” the World Bank said in the Global Economic Prospects report it released yesterday.
The World Bank expects the country’s economy to have grown by 6.7% in 2017, a pace that will be sustained until 2019 before slowing to 6.5% in 2020.
If realized, that pace will fall within the government’s 6.5-7.5% growth goal for 2017 but will fall short of a 7-8% annual target from 2018 to 2022.
Philippine projections are better than those for East Asia and the Pacific (6.4% in 2017, 6.2% in 2018, 6.1% in 2019 and 6.0% in 2020) and for the world (3.0% in 2017, 3.1% in 2018, 3.0% in 2019 and 2.9% in 2020.
The World Bank’s Philippine forecast matches its estimate for Vietnam and Laos for last year, while Cambodia will grow faster — by 6.8%.
For 2018, Cambodia is still seen to top Southeast Asia with 6.9%, while Myanmar will match the Philippines’ growth, following Laos’ 6.6% and Vietnam’s 6.5%.
The global lender on Dec. 15 hiked its Philippine projection for last year to 6.7% from 6.6% in the East Asia and the Pacific Economic Update report published in October, citing faster-than-expected merchandise export growth.
The 2018 and 2019 forecasts for the Philippines on the other hand were cut in the same October report from 6.9% and 6.8%, respectively in the July report.
To compare with other multinational lenders, the Asian Development Bank (ADB) likewise estimated a 6.7% forecast for 2017; while the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development have a 6.6% projection for this year.
For this year, the IMF sees the Philippine economy growing by 6.7%, while ADB and ESCAP project a 6.8% expansion.
Actual Philippine gross domestic product growth averaged 6.7% in the 10 months to October according to the Philippine Statistics Authority, and Socioeconomic Planning Secretary Ernesto M. Pernia has said that fourth-quarter expansion — scheduled to be reported later this month — may “be a bit higher than 6.7%.”
The World Bank credited state policy for the Philippines’ generally sound macroeconomic fundamentals.
“In some ASEAN economies, such as Indonesia and the Philippines, supportive monetary policy had spurred investment and, hence, capital accumulation in the wake of the global financial crisis,” the World Bank said.
“Rapid capital accumulation has also reflected infrastructure upgrades. In the Philippines, improved macroeconomic policy management and the government’s public-private partnership initiative, have boosted capital accumulation.”
East Asia and the Pacific, the same report said, “is expected to continue to be a major driver of global growth.”
But while risks to the region “have become more balanced,” they are “still tilted to the downside,” the report added, particularly citing geopolitical tensions on the Korean peninsula, a faster-than-expected tightening of financial conditions, a steeper-than-expected slowdown of major economies, increased protectionist sentiment in advanced economies like the United States and policy changes from the United Kingdom’s departure from the European Union.