Despite the World Bank (WB) reducing its growth projections for the Philippines, the international financial institution maintains that the country’s economy remains one of the fastest-growing in the East Asia and Pacific region.
The WB revised through a statement its growth forecasts of the Philippine economy for the next two years, revising the figures to 6.4 percent from 6.5 percent in 2018, and 6.5 percent from 6.7 percent in 2019. The changes reportedly are to “reflect recent economic trends.”
“A strong, consistent delivery of the infrastructure investment agenda while sustaining improvements in health, education and social protection will be key to maintaining the robust and inclusive growth outlook of the Philippines,” WB Senior Economist Rong Qian said.
Recent economic trends referred to include persistent high inflation rates, which may temper private consumption growth in the fourth quarter of 2018. However, moderation in the quarters to follow is expected to boost consumer confidence and raise private consumption by the new year. A series of government measures have recently been implemented to achieve this tempering of inflation, including the recently passed Rice Tarrification Bill which would lift qualitative restrictions on the amount of race which can be imported into the country.
The WB also cited in its report the coming mid-term elections in May 2019. The polls are expected to strengthen consumption, temporarily raise employment, and boost disposable incomes in early 2019.
“Investment growth however maybe be tempered in the first half of 2019 due to the possible reenactment of the first-quarter 2019 budget following a delay in the budget approval process. Moreover, global trade is expected to remain weak, thus dampening exports,” the Bank added.