The World Bank has raised its growth forecasts for the Philippines for this year and the next two years, citing sustained high consumer and investor confidence in the near term.
Separately, the country’s chief economist Thursday did not discount the possibility that the gross domestic product (GDP) growth for this year could exceed the higher end of the government’s 6-7 percent target.
Economic Planning Secretary Ernesto M. Pernia said it would be possible to surpass a 7-percent full-year growth if the economy would expand by 7.2-7.3 percent in the fourth quarter.
Pernia said he expected the economy to groThursdayw by “close to 7 percent” in the last three months of the year to bring full-year expansion of 6.5-7 percent.
The Philippines’ GDP growth averaged 7 percent in the first nine months, among the fastest in Asia.
The World Bank, meanwhile, upgraded its Philippine growth projection for 2016 to 6.8 percent from the 6.4-percent forecast last October.
“Growth in the third quarter of 2016 was higher than expected with accelerating investment and private consumption growth. This continued the strong growth performance of the economy in the first half of 2016 which was driven by the government’s pre-election stimulus,” the World Bank said in a statement. The Philippine economy grew by 7.1 percent in the third quarter of the year.
“Recent economic trends illustrate the high confidence among investors and consumers, and provide the foundation for a more optimistic outlook for the remainder of 2016 and for 2017. The economy’s strong performance in October and November, and continued policy commitment to an increase in infrastructure spending are expected to carry the economy’s growth momentum over to 2017-2018,” Birgit Hansl, World Bank lead economist for the Philippines, said.
For 2017, the World Bank’s economic growth forecast for the Philippines was also raised to 6.9 percent from 6.2 percent previously. For 2018, the target was set at 7 percent.
“Growth in capital investment is projected to remain the Philippine economy’s primary growth engine. Despite an expected increase in interest rates in 2017, monetary policy is expected to remain supportive of growth, resulting in continued expansion in credit,” the World Bank said.
“The implementation of large infrastructure investments is projected to lead to significant spillover effects into consumption growth next year. Accompanied by robust credit growth to households and healthy remittances, this is expected to fuel consumption,” the World Bank added.