World Bank upbeat on PH

The World Bank sees the Philippines’ gross domestic product (GDP) growth nearing the middle of the government target range in 2017 while sustaining gains to make the robust economic expansion enjoyed in recent years more inclusive.

In its April 2017 Philippine Economic Update report titled “Advancing the Investment Agenda” released yesterday, the World Bank kept its forecast of 6.9-percent GDP growth for this year to match last year’s performance.

The government targets a 6.5- to 7.5-percent GDP growth in 2017.

For 2018, the World Bank projected the economy to grow by 6.9 percent, slightly lower than the projection of 7 percent set in December. Economic growth is seen slightly slowing to 6.8 percent in 2019.

The World Bank’s forecasts for 2018 and 2019 were below the government’s target range of 7-8 percent from 2018 to 2022.

World Bank Philippines lead economist Birgit Hansl told a press briefing that they were bullish about Philippine prospects, especially as “the government’s commitment to further increasing public infrastructure investment is expected to sustain the country’s growth momentum through 2018 and reinforce business and consumer confidence.”

“The implementation of the planned infrastructure projects could generate positive spillover effects for the rest of the economy, spurring additional business activity, accelerating job creation, and ultimately contributing to higher household consumption and poverty reduction,“ Hansl said.

As such, “supported by sound domestic macroeconomic fundamentals and an accelerating recovery among other emerging markets and developing economies, the Philippines is expected to remain one of East Asia’s top growth performers,” according to Hansl.

In a statement, World Bank Philippines country director Mara K. Warwick said “strong growth in recent years has been accompanied by job creation and a declining number of people living in extreme poverty,” adding that economic growth was becoming “more inclusive.”

Hansl noted that “unemployment fell to a historic low of 4.7 percent in 2016, as 1.4 million net jobs were created” while “the poverty incidence among Filipinos dropped to 21.6 percent in 2015 from 25.2 percent in 2012” or equivalent to 1.8 million Filipinos lifted out of the poverty line during the three-year period.

“Higher employment, low inflation and improved incomes contributed to the decline in the number of poor. One factor in the decline in poverty was the government’s conditional cash transfer program, the Pantawid Pamilyang Pilipino Program, whose budget increased by almost 200 percent to P62.3 billion between 2011 and 2015, and whose household coverage almost doubled to 4.4 million households,” Hansl said.

However, Hansl noted that “unemployment remains high among 15-to 24-year-olds, many of whom are entering the job market for the first time” while “the country’s 18-percent underemployment level has remained broadly unchanged over the last 10 years, reflecting the prevalence of informality and related job-quality concerns.”

“Under investment contributes to high rates of informality and low job quality, and it weakens the impact of employment growth on poverty reduction,” Hansl said.