World Bank sees PHL GDP to grow 6-7% in 3 years

World Bank sees PHL GDP to grow 6-7% in 3 years (Photo by G0T0 (Own work) [CC0])

In its 2017 Global Economic Prospects (GEP) report released in Washington on Tuesday (Wednesday in Manila), World Bank forecasted gross domestic product (GDP) for the Philippines in 2019 to grow 6.7 percent.

The World Bank also hiked its projection for the Philippines in 2017 and 2018, which was forecasted in June 2016 to settle at 6.2 percent for both years.

The latest report now expected Philippine GDP to expand 6.9 percent for this year, higher by 0.7 percentage points from its previous projection.

Higher growth projection is likewise seen next year at 7.0 percent, up by 0.8 percentage points.

Economic growth projection for the full year of 2016 was also upgraded to 6.8 percent from its previous forecast of 6.4 percent due to higher-than-expected growth in third quarter last year at 7.1 percent.

In its Philippines Monthly Economic Developments released last month, the World Bank noted that the optimistic outlook for the economy is driven by high confidence among investors and consumers.

“Continued policy commitment to the planned increase in public infrastructure spending is expected to carry the economy’s growth momentum over to 2017 to 2018,” the World Bank office here stated.

Moreover, the Philippine economy has endured the slowdown in investment growth globally and within the East Asia and Pacific.

According to the 2017 GEP, investment growth in the region has steadily declined from 12.1 percent in 2010 to 6.5 percent in 2015 to 2016.

“It reflected a deceleration in public as well as the private sector, as the coordinated fiscal stimulus following the global financial crisis was unwound (especially in China),” the World Bank report noted.

The report also mentioned that there were delays in investments in Thailand and the Philippines, contributing to the easing of investment growth in the region.

“The uncertainty due to political problems in Thailand and delays in investment approvals in the Philippines held back investment in these countries,” the report added.

The World Bank, however, noted that there is substantial demand for investment in infrastructure in East Asia and Pacific.

“The region shows a significant disparity in density and quality of transport networks, electricity provision, and housing with greater gaps in China, Indonesia, and lower-income ASEAN economies,” it stated in the report.

The report, on the other hand, has lauded investments of East Asia and Pacific countries in human development, particularly in health and education.