The World Bank slightly reduced its 2017 growth forecast for the Philippines to 6.8 percent from the initial estimate of 6.9 percent on slower public spending in the first quarter.
The bank, however, kept the 2018 growth forecast at 6.9 percent.
“The World Bank projects continued robust growth for the Philippines and expects the country’s economy to expand at 6.8 percent in 2017,” Birgit Hansl, World Bank lead economist for the Philippines, said in an update of the economic outlook for the Philippines for 2017 to 2018.
Hansl said the new and slightly revised 2017 projection considered recent economic trends and compared with the 6.9-percent forecast released in the April edition of the World Bank Philippine Economic Update.
“Reflecting slower public spending in the first quarter, government consumption and investment growth somewhat weakened on an annual basis. However, export and growth of private consumption remained strong,” she said.
She said the actual 6.4-percent growth in the first quarter of 2017 was in line with the bank’s growth projection, given the high base in the first quarter of 2016, when large election-related spending boosted growth.
“In the medium-term, supporting higher investment levels will be critical to sustain the economy’s growth momentum…. The government’s ability to realize its infrastructure spending agenda will determine if the Philippines can achieve the growth target of 6.5-7.5 percent for 2017,” she said.
The bank is anticipating consumption to grow at a stable rate of 5.6 percent in 2017 and 6.1 percent in 2018, compared to 7.2 percent in 2016. It said the prospect of maintaining consumption growth at current levels over the medium term was supported by robust remittance flows, which increased 8 percent in the first quarter of 2017, compared to 3 percent in the first quarter of 2016.
“Continued economic growth is expected to lead to increased job opportunities, and sustained economic expansion has already begun to contribute to increasing incomes across all income groups,” the bank said.
