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Tuesday, March 19, 2024

World bank also raises growth target

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THE World Bank raised its growth projection for the Philippines this year to 6.7 percent from the previous estimate of 6.6 percent after a stronger-than-expected 6.9-percent expansion in the third quarter.

“Continued global economic recovery gaining steam has led to higher than expected export growth for the Philippines and an encouraging upturn for the third quarter of 2017,” Birgit Hansl, World Bank lead economist for the Philippines, said in a statement Friday.

“Following a stronger-than-expected growth of 6.9 percent in third quarter and a revision of GDP growth for the second quarter, from 6.5 to 6.7 percent, the World Bank projects 6.7 percent growth for 2017—higher than its previous forecast of 6.6 percent,” Hansl said.

The World Bank updated its 2017 growth projection for the Philippines, as part of its quarterly forecast exercise to reflect recent economic trends.

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Hansl said the simultaneous recovery in major advanced and developing economies was boosting global trade. For the Philippines, she said it meant stronger import demand from the country’s main trading partners, such as the United States, Japan, and Europe.

However, the multilateral lender kept the growth projection for 2018 at 6.7 percent.

“If investment growth accelerates faster along with increased spending in public infrastructure, economic expansion can be even higher in 2017 and 2018 and exceed the current projection of 6.7 percent,” Hansl said.

On Wednesday, the Asian Development Bank also raised its growth forecast for the Philippines in 2017 and 2018, on strong infrastructure spending and consumer demand.

The ADB said in a supplement to its Asian Development Outlook Update 2017 report that it raised its 2017 gross domestic product growth forecast to 6.7 percent from 6.5 percent and the 2018 outlook to 6.8 percent from 6.7 percent.

“This outlook assumes that growth in the government’s infrastructure program will accelerate, supported by improvements in budget execution, with more large investment projects under way,” the Manila-based multilateral lender said.

The economy expanded 6.7 percent in the first three quarters of 2017 on accelerating investment and robust consumption. The economy expanded 6.9 percent in 2016.

“The government is on track to achieve its target of spending 5.3 percent of GDP on public infrastructure this year. Meanwhile, household consumption remained strong despite moderating slightly from last year,” the ADB said.

It noted that net exports turned positive in the first nine months, reversing a deficit in 2016. On the supply side, services generated nearly 60 percent of GDP growth, spurred largely by trade, business process outsourcing, finance and real estate services. 

Manufacturing contributed about 30 percent of the expansion in GDP, with food processing a major contributor.

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