World Bank keeps 6.7% growth forecast for Philippines

MANILA, Philippines — The World Bank is maintaining its growth projection of 6.7 percent for the Philippines this year and in 2019 as it sees the economy being driven by strong consumption.

In a statement issued yesterday, the financing institution said it expects increased public investments due to higher public capital outlays and infrastructure spending.

It also expects private consumption to expand by 5.9 percent this year, further strengthening by 6.2 percent in 2019.

The World Bank said real GDP growth is expected to accelerate toward the end of 2018 into the first half of 2019 due to spending related to the 2019 senatorial elections.

“The government’s ability to carry out its investment spending agenda will determine if the Philippines can achieve its growth target of 6.5-7.5 percent over the medium term,” said Birgit Hansl, World Bank lead economist for the Philippines.

“In addition, higher private investment levels will be critical to sustain the economy’s growth momentum as capacity constraints become more binding,” she added.

In its June 2018 Global Economic Prospects report, the bank also cautioned the country to be vigilant of the economy’s capacity to service rising demand to stave off inflationary pressures.

The bank also warned that Philippine exports are projected to moderate in the coming years as global growth is expected to decelerate because of a confluence of factors including higher commodity prices, strong but gradually moderating global demand, and tightening of global financing conditions.

“Uncertainty around global growth conditions has risen, with the possibility of trade and other policy shocks emerging from major economies,” said the bank.