The World Bank expects the Philippine economy to sustain its growth momentum this year and next and outperform the rest of the region, including economic powerhouse China.
The bank said in its June 2017 Global Economic Prospects report the Philippine economy could register a 6.9-percent growth in 2017 and 2018.
“Growth in the Philippines is forecast to hold steady at 6.9 percent this year and the next, led by a pickup in public and private investment,” the bank said.
Such a growth would be faster than other major Asian economies including China which was projected to expand 6.5 percent in 2017. Actual gross domestic product growth in the Philippines reached only 6.4 percent in the first quarter, below the government’s target.
The World Bank said growth in the East Asia and Pacific region would likely ease to 6.2 percent in 2017 and to 6.1 percent in 2018, as the gradual slowdown in China would be offset by a pickup elsewhere led by a rebound among commodity exporters and accelerating growth in Thailand.
“Growth in China is anticipated to slow to 6.5 percent this year and 6.3 percent in 2018. Excluding China, the region is seen advancing at a more rapid 5.1 percent rate in 2017 and 5.2 percent in 2018,” it said.
Indonesia is seen to pick up to 5.2 percent in 2017 and 5.3 percent in 2018 as the effects of fiscal consolidation dissipate and as private activity picks up, supported by modestly rising commodity prices, improving external demand and increased confidence due to reforms.
Thailand is expected to maintain a 3.2-percent growth in 2017, accelerating to 3.3 percent next year, supported by greater public investment and recovering private consumption.
The World Bank also predicted that global economic growth would strengthen to 2.7 percent in 2017 as a pickup in manufacturing and trade, rising market confidence and stabilizing commodity prices allow growth to resume in commodity-exporting emerging market and developing economies.
The bank, however, warned of risks that could affect global growth. These include heightened policy uncertainty in the United States, where trade, immigration, and fiscal policies are under review and in Europe, where the exit of the United Kingdom from the European Union carries risks that could weigh on investor confidence.
The Duterte administration expects the economy to grow between 6.5 percent and 7.5 percent this year on higher fiscal spending, robust domestic demand and investments.
The economy grew 6.9 percent last year, driven mostly by strong domestic demand, higher fiscal spending and investments.
The Asian Development Bank earlier kept its growth estimate for the Philippines this year at 6.4 percent but saw growth would likely accelerate to 6.6 percent in 2018 once the government ramped up public infrastructure investment.
The International Monetary Fund, for its part, said the Philippine economy had the potential to expand by 6.8 percent this year with the recovery of exports and faster fiscal expenditures.