World Bank sees 6.7% PH growth

The World Bank sees the Philippine economy growing by 6.7 percent this year and next, similar to the pace of expansion last year, amid expectations of strong growth prospects across the region.

In its East Asia and Pacific Economic Update April 2018 report titled “Enhancing Potential” released on Thursday, the World Bank kept its growth forecasts for the Philippines for 2018 and 2019 while projecting a slightly slower 6.6-percent expansion in 2020.

The World Bank’s gross domestic product growth projections for the next three years fell below the government’s 7-8 percent target range until 2022.

“Any growth above 6.7 percent would require vigorous investment in physical and human capital to push the economy beyond its current potential output. Investment growth hinges on the government’s ability to effectively and timely implement the ‘Build, Build, Build’ public investment program,” the World Bank said in the report.

Under “Build, Build, Build,” the government plans to roll out 75 flagship projects, with about half targeted to be finished within President Duterte’s term.

Also, the World Bank said that the Philippines was “expected to benefit from the global recovery during 2018,” although “export growth is expected to level off compared to its strong expansion in 2017 while imports are projected to remain elevated due to high demand for intermediate and capital goods.”

Last Wednesday, the government reported that exports declined in February, ending 15 straight months of growth, even as imports posted double-digit expansion for the fifth consecutive month.

In line with sustained strong economic growth, the World Bank said that “the poverty rate based on the lower middle-income class line is projected to decline to 22.9 percent in 2018.”

However, the bank warned that the pace of poverty reduction might drop slightly in the face of increasing inflation even as poverty was expected to continue to fall as the economy grew and transition out of agriculture.

But as a whole, “the sustained overall growth would support the continuous poverty reduction,” the World Bank said.

Downside risks included a faster-than-expected pace of policy rate normalization in advanced economies. —BEN O. DE VERA