The World Bank said Thursday it expects the Philippine economy to grow 6.4 percent in 2016, on the back of higher infrastructure spending, rising household income and sustained foreign investments.
The Washington-based multilateral lender said in its Global Economic Prospects report that growth in the Philippines was expected to accelerate this year, as public-private partnership projects began to pick up.
“In the Philippines growth is projected to firm to 6.4 percent in 2016, reflecting accelerated implementation of public-private partnership projects and spending related to the May 2016 presidential elections,” the World Bank said.
It said that in 2017 to 2018, the country’s economic growth was expected to ease to 6.2 percent.
“The Philippines and Vietnam are among the countries with the strongest growth prospects,” the report said.
The Philippines will continue to benefit from rising household incomes caused by low commodity prices and foreign direct investment flows, it said.
The World Bank said the Philippines experienced less pressure on currency, with exchange rate depreciating 5 percent and foreign reserves continuing to rise.
The World Bank said the Philippines should broaden its tax base and strengthen public revenue administration to sustain growth.
The World Bank said the East Asia and the Pacific region was expected to grow 6.3 percent in 2015, slower than 6.8 percent in 2015, mainly due to growth deceleration in China.
“Despite the slowdown in commodity exporters, growth in the region excluding China was broadly flat [4.6 percent in 2015], thanks to strong performance in commodity importers, especially in Vietnam and the Philippines, and a moderate recovery in Thailand,” the World Bank said.
“Growth in the East Asia and Pacific region is projected to slow to 6.3 percent in 2016, with China’s expansion expected to ease to 6.7 percent. The region excluding China is anticipated to see growth accelerate modestly in 2016 to 4.8 percent,” it added.
The WB also said risks to the economic outlook included the faster-than-expected slowdown in China and financial market volatilities.
“The possibility of greater financial market volatility and restricted credit are also risks to growth. A steep appreciation of the value of the U.S. dollar and a slower-than-expected acceleration of high income economies would also dent growth prospects in the region,” the bank said.