PH growth seen to slow down this year
The Organization for Economic Cooperation and Development (OECD) expects the Philippine economy to grow slower this year amid high consumer prices, while it urges the government to address underemployment as well as risks to jobs coming from automation.
In its “Economic Outlook for Southeast Asia, China and India 2019” report released Monday, the OECD projected the Philippines’ gross domestic product (GDP) growth to slow to 6.4 percent in 2018 from 6.7 percent last year, before inching up to a slightly faster 6.5-percent in 2019.
The OECD’s forecast is below the government’s downgraded target range of 6.5-6.9 percent for this year and 7-8 percent for next year.
The OECD noted that “inflation is on an uptrend in China, the Philippines, Thailand and CLM (Cambodia, Laos and Myanmar) countries while it is relatively stable or even declining in other emerging Asian countries.”
“The increase in global oil prices and domestic factors affect these trends, although the moderation of global food prices provides some respite,” the OECD said.
Elevated prices of basic commodities tempered economic growth during the first three quarters, averaging only 6.3 percent as year-to-date headline inflation in the first 10 months already hit 5.1 percent, above the government’s 2-4 percent target.
Despite the elevated inflation rate, the OECD expects the Philippine economy to grow by 6.6 percent yearly in the next five years until 2022, which will be equal to the average GDP growth from 2012-2016.
“Overseas remittances will still be an important component of private consumption. Robust public budgetary spending should help buoy the economy, albeit the quality of spending can still be improved,” the OECD said.
However, the OECD said that “the underemployment rate, which has recently risen again despite the decline in the labor participation rate, requires attention.” Underemployment rose to 17.2 percent in July from 16.3 percent a year ago, equivalent to about seven million workers, the latest government data showed.
In July last year, the number of underemployed Filipinos was a lower 6.5 million.
Also, the OECD warned about the potential impact of digitization on employment in the information technology and business process management industry.
