The Organization for Economic Cooperation and Development (OECD) sees the Philippines’ economic growth falling below the government’s goal in 2019 and 2020, with last year’s expansion slowed by public and private consumption as well as investments that shrank partly due to the late approval of the national budget.
In its Economic Outlook for Southeast Asia, China and India 2020 report released recently, the OECD grouping of rich countries projected Philippine gross domestic product (GDP) expansion to slow to 5.6 percent in 2019 and 6 percent in 2020 from 6.2 percent in 2018. The government was expecting GDP growth of 6-6.5 percent last year, rising to 6.5-7.5 percent this year.
For the period 2020-2024, the OECD forecasts the Philippines’ economic growth to average 6.2 percent, slower than the 6.6 percent from 2013 to 2017.“Labor market conditions are working in favor of consumption, but a thorough examination of the declining labor-force participation rate is needed to deepen the market.
Infrastructure implementation delays remain a challenge. Improving disaster resilience is also vital,” the OECD said of the Philippines’ economic prospects in the next five years.According to the OECD, leading indicators point to slower growth in 2019 and 2020 than initially projected.
“Nominal growth in goods exports continued to ebb. This is mirrored by a slump in the industrial production index,” the OECD said.
On a positive note, the OECD said “stronger tourist arrival momentum and improving consumer sentiment are positives for private spending and the recovery in overseas remittance growth provides additional support to the appetite for spending.”
It added that the early passage of the 2020 budget could help avert the disbursement bottlenecks experienced in the first half of 2019.
President Duterte on Jan. 6 signed the P4.1-trillion 2020 national budget—compared with the 4.5-month lag in the approval of the P3.7-trillion 2019 budget amid squabbles among legislators over alleged pork funds that spilled over until early last year. INQ