The World Bank maintained its forecast of 5.6-percent Philippine gross domestic product (GDP) growth in 2023, saying government spending and remittances would support the economy in the fourth quarter.
The bank’s latest Philippine Economic Update projects continued growth in the fourth quarter as government spending accelerates, with lower inflation, a healthy labor market and an anticipated rise in holiday-related remittances supporting robust private consumption.
Gradual inflation decline starting next year, coupled with sustained public investment, should fuel growth over the forecast horizon, the bank said.
“Over the medium term, an improvement in domestic demand is expected to drive a modest increase in growth to an average of 5.8 percent in 2024 to 2025,” the bank noted.
Growth will likely be driven by services, fueled by the tourism industry’s recovery and the consistent performance of the information technology-business process outsourcing sector. This is expected to create jobs, boost household incomes and benefit consumption and tourism-related industries.
Meanwhile, the bank emphasized the need for strong national government support for municipalities and cities in achieving universal access to safe water and sanitation, crucial for strengthening human capital, public health, and poverty reduction.
Only 48 percent of Filipinos receive safely managed or piped water services, and roughly 63 percent have access to safely managed sanitation services or proper waste collection, treatment, and disposal. These figures are considerably lower than the regional East Asia Pacific average of 74 percent for water access and 69 percent for sanitation access.
“Lack of access to basic water and sanitation services is associated with illness, malnutrition, and childhood stunting. Nearly one-third of Filipino children suffer from stunting,” the bank said.
The Philippines aims to achieve universal access to safe water and sanitation services by 2030, aligned with its commitment to the UN Sustainable Development Goals.
The National Economic Development Authority (NEDA) prepared a master plan in 2021 to meet this target, requiring investments exceeding P100 billion annually from both private and public sectors.