THE Philippines will continue outperforming other top economies in Asia this year and in 2017, multilateral lender International Monetary Fund said in a report Tuesday.
The IMF in its latest regional outlook released May 3 maintained its growth forecast for the Philippines at 6 percent this year and 6.2 percent in 2017.
“The modest uptick in growth is expected to be driven by the continued strength of domestic demand, which will more than offset the drag from net exports. The latter will remain subdued, but spillovers from China are and will continue to be smaller than in other parts of the region,” the IMF said.
It said domestic demand would benefit from higher public consumption and investment growth, but private demand was also expected to remain buoyant, helped by low unemployment, low oil prices and higher workers’ remittances.
“Private investment growth is expected to remain robust owing to improvements in public infrastructure and implementation of public-private partnership projects,” the IMF said.
The forecasts for the Philippines this year and next was higher than Indonesia’s 4.9 and 5.3 percent; Malaysia’s 4.4 and 4.8 percent; and Thailand’s 3 and 3.2 percent.
In the April World Economic Outlook, the IMF said the economic outlook for the Philippines was one of the strongest in the region but subject to increased downside risks, including lower growth in China and the region, higher global financial volatility and capital outflows, and weather-related disruptions.
But is said the Philippines’ capacity to respond if these risks materialized was substantial given its ample reserves and policy space in both monetary and fiscal.
To support growth, IMF said structural reforms would also be needed to raise the low rate of government revenue and infrastructure investment, opening up the economy to greater competition and foreign investment, and benefiting from the demographic dividend by addressing skill mismatches and inequality of opportunity.
The IMF, during a mission to the Philippines led by Chikahisa Sumi from
Feb. 11 to 17, lowered its growth forecast for the Philippines this year to 6 percent from the previous estimate of 6.2 percent made in January, on account mainly of slower global growth, financial market volatility and capital reversals.
The forecast for 2017 was also reducedto 6.2 percent from 6.5 percent.
The 5.8-percent GDP growth last year was below the 6.1-percent expansion a year ago but remained one of the fastest in Asia. It was significantly below the government’s official forecast of between 7 to 8 percent last year.
The government expects economic growth this year at 6.8 percent to 7.8 percent anchored on robust domestic demand.
