World Bank: Philippines to remain one of fastest-growing economies in East Asia

The Philippine government is embarking on an ambitious $180 billion infrastructure program aimed at accelerating growth and creating 12 million new jobs through these projects. (Courtesy World Bank)

DUBAI: The Philippines would sustain its robust economic growth and remain one of the top-growing countries in East Asia and the Pacific until 2020, the World Bank said on Wednesday.
The Washington-based multilateral lender, in its latest report, projected the Philippine economy to grow 6.7 percent this year and in 2019, and 6.6 percent in 2020. The forecasts were however considerable lower than the government’s medium-term target of between 7 percent and 8 percent from 2018 until 2022.
“Growth in the Philippines and Vietnam remains robust, but capacity constraints (e.g., high capacity utilization rates) limit further acceleration, especially in the Philippines,” the World Bank’s June Global Economic Prospects report noted.
Among other East Asian and Pacific nations, Cambodia and Vietnam will outpace the Philippines’ gross domestic product (GDP) growth this year at 6.9 percent and 6.8 respectively, while China will lag a little at 6.5 percent GDP growth for 2018.
India’s economy, to which the Philippines is usually compared, is expected to grow by 7.3 percent this year and then accelerate to 7.5 percent in 2019 the year thereafter.
“Overall, the region benefits from solid fundamentals, including moderate domestic and external imbalances and significant policy buffers,” the World Bank noted in its report, although it cautioned some countries in the region continued to confront financial sector vulnerabilities.
The Philippines, including China and Vietnam, continues to experience fast credit growth while countries such as Malaysia, Laos and Thailand had to deal with elevated levels of debt. Cambodia and Vietnam also had to contend with their sizable fiscal deficits, the World Bank said in the report.
On a broader scale, the Bank said that regional growth would gradually moderate from a 6.8 percent clip in 2018 to 6.1 percent in the next two years.
“The slowdown in regional growth is largely due to the gradual structural slowdown in China the region’s largest economy. Activity in the rest of the region is expected to peak in 2018 and remain steady around its potential rate in 2019 and 2020,” the World Bank said. “The outlook is predicated on broadly stable commodity prices in the next two years, solid but moderating global demand, and a gradual tightening of global financing conditions.”