The World Bank on Wednesday retained its 6.4-percent growth forecast for the Philippines, while reducing the outlook for the global economy.
The Washington-based multilateral said in its Global Economic Prospects that the Philippines was expected to have the strongest growth prospects among the major members of the Association of Southeast Asian Nations.
“Among the large developing Asean economies, Vietnam and the Philippines have the strongest growth prospects. In the Philippines, growth is projected to firm to 6.4 percent in 2016, with an accelerated implementation of public-private partnership projects and strong domestic demand,” the bank said.
“The country benefits from diversified export markets and low global commodity prices,” it said.
The World Bank said the fiscal deficit of the general government narrowed significantly from 3.5 percent of gross domestic product in 2010 to just under 1 percent in 2015, helped by strong revenue collection through faster growth and improved tax administration.
The bank also kept the 6.2-percent growth forecast for the Philippines in 2017 and 2018.
The gross domestic product growth grew 6.9 percent in the first quarter. Budget Secretary Florencio Abad said growth would likely be faster in the second quarter on election-related spending.
“We expect even better performance in the second quarter and so if more efforts are in fact devoted to attracting more tourists, more foreign direct investments, getting the public-private-partnerships inaugurated in the shortest possible time, then this economy and government will continue to be in good shape,” Abad said.
Meanwhile, the World Bank downgraded its 2016 global growth forecast to 2.4 percent from the 2.9 percent it projected in January.
It said the revision was due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade and diminishing capital flows
“This sluggish growth underscores why it’s critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty,” said World Bank group president Jim Yong Kim.
“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices,” he said.
Growth in the East Asia and Pacific region is projected to slow to 6.3 percent in 2016, with China’s expansion expected to ease to 6.7 percent. The region excluding China is projected to grow 4.8 percent in 2016, unchanged from 2015.