By Paolo G. Montecillo
THE PHILIPPINE economy will recover in the coming year as consumers and producers receive a boost from lower fuel prices, freeing up their wallets for other expenses, according to the International Monetary Fund.
A new report by multilateral lender showed that the Philippines managed to beat its peers in Southeast Asia, some of which rely on the oil they produce to support their economies, particularly Malaysia and Indonesia.
This follows the recent crash in global oil prices, which have fallen by over half since September of last year—a windfall for countries that import their fuel requirements like the Philippines.
Stronger growth this year and in 2016 “reflects the boost from lower global oil prices and anticipated pickup in government spending from the low base in 2014,” IMF resident representative for the Philippines Shanaka Jayaneth Peiris said in an e-mail.
For 2015, the IMF sees the Philippine economy growing by 6.6 percent, better than its previous forecast of 6.3 percent. In 2016, growth is expected at 6.4 percent.
Last year, the IMF said, the economy likely grew by just 5.8 percent following the slower-than-expected growth numbers seen in the first and third quarters of 2014. Its previous projection stood at 6.2 percent.
All other forecasts are lower than the state goals of at least 6.5 percent for 2014, 7 percent for 2015, and 7.5 percent in 2016.
Last year’s slowdown was a result of weak agricultural output due to damage to farmlands caused by Supertyphoon “Yolanda” in late 2013, apart from tepid government spending.
Earlier this month, the World Bank slashed its 2015 growth forecast for the Philippines to 6.5 percent, from the previous 6.7 percent. The rest of Asia Pacific, meanwhile, is expected to grow by 6.9 percent.
In its World Economic Outlook (WEO) update released Monday, the IMF said the Asean 5, or the five major economies in the Association of Southeast Asian Nations, could grow by 5.2 and 5.3 percent in 2015 and 2016, respectively. Both projections were lower than the IMF’s forecasts made in October 2014.
Despite the downward revisions, the Asean region may still outperform the rest of the world, which is expected to grow by 3.5 and 3.7 percent in 2015 and 2016, respectively. Both projections are 0.3 of a percentage point lower than the forecasts made in October 2014.