The Philippines would sustain its robust economic growth this year given its strong and resilient domestic demand, the International Monetary Fund (IMF) said Tuesday.
In its Regional Economic Outlook for Asia and the Pacific report, the multilateral lender kept its gross domestic product (GDP) growth forecasts for the Philippines of 6 percent this year and 6.2 percent in 2017, faster than last year’s 5.8-percent expansion.
“The modest uptick in growth is expected to be driven by the continued strength of domestic demand, which will more than offset the drag from net exports,” the IMF said.
In the next two years, “domestic demand will benefit from higher public consumption and investment growth, but private demand is also expected to remain buoyant, helped by low unemployment, low oil prices and higher workers’ remittances,” according to the IMF.
The rollout of public-private partnership or PPP projects to address the lack of public infrastructure in the country would bolster private investments as well, the IMF added.
Net exports or external trade as a whole would remain subdued in the near term, although the Philippines was seen being impacted minimally by the slowdown in the Chinese economy, the lender said.
“Spillovers from China are and will continue to be smaller than in other parts of the region,” the IMF said.
It noted that last year, despite the impact of lower net exports, real GDP growth remained robust in the Philippines, with domestic demand benefiting from favorable terms of trade.