The Philippine economy is projected to accelerate to 6.8 percent on average in 2017 to 2019, the World Bank said in its latest report.
According to the latest Global Economic Prospects, the Washington-based agency’s projected growth for the Philippines over the three-year period will be supported by ongoing infrastructure projects, strong consumption, buoyant inflows of remittances and strong revenue from services exports.
“Among the large commodity importers, Vietnam and the Philippines continue to have the strongest growth prospects, although capacity constraints will likely limit acceleration in the medium term and could cause overheating pressures,” the report said.
Specifically, the World Bank projects the Philippine economy will expand by 6.9 percent this year, seven percent next year and 6.7 percent in 2019.
The country’s economic growth for 2016 is set to be announced late this month, but the World Bank estimates that the Philippine economy grew by 6.8 percent last year.
Ernesto Pernia, socioeconomic planning secretary, said earlier this week the Philippines’ economic growth last year is seen to be at the higher range of the 2016 target of six to seven percent.
“I hope it’s seven percent for the entire year of 2016, it’s easier to remember,” Pernia said.
For the fourth quarter of 2016, he said growth could range between 6.8 percent and 7.4 percent, driven by manufacturing, consumption, and domestic and foreign investment.
WB said global growth would accelerate slightly as recovering oil and commodity prices ease pressures on emerging-market commodity exporters and painful recessions in Brazil and Russia come to an end.
It expected 2017 real gross domestic product growth to rebound to 2.7 percent from a post-financial crisis low of 2.3 percent last year.
Growth in advanced economies is expected to edge up to 1.8 percent in 2017 from 1.6 percent in 2016, the World Bank said, while emerging and developing economies will see growth accelerate to 4.2 percent this year from 3.4 percent last year.
“After years of disappointing global growth, we are encouraged to see stronger economic prospects on the horizon,” World Bank Group President Jim Yong Kim said in a statement. “Now is the time to take advantage of this momentum and increase investments in infrastructure and people.”
However, there was considerable uncertainty surrounding the forecasts, which did not incorporate the effects of various policy proposals from U.S. President-elect Donald Trump, which are expected to include increased fiscal stimulus from tax cuts and infrastructure spending, and a more protectionist trade stance.
The World Bank forecasts 2017 U.S. growth at 2.2 percent versus 1.6 percent in 2016, but the increase could be considerably larger -- and have effects far beyond U.S. shores.
“A surge in U.S. growth -- whether due to expansionary fiscal policies or other reasons -- could provide a significant boost to the global economy,” the bank said.
However, this could lead to higher interest rates and tighter financial conditions that would have adverse effects on some emerging market countries that depend heavily on external financing.
It added that lingering uncertainty over the course of U.S. economic policy could weigh on global growth by keeping investment money on the sidelines until there is more policy clarity.
The World Bank said China’s growth would continue to slow, easing to 6.2 percent in 2017 from 6.7 percent in 2016, but growth would edge higher in some Southeast Asian economies, including Indonesia and Thailand.
India’s strong growth is expected to accelerate, rising to 7.6 percent in 2017 from 7.0 percent in 2016 as reforms ease domestic supply bottlenecks and increase productivity.