Recently the World Bank announced that the economy of the Philippines will continue to grow strongly this year and next year, according to a Philippine News Agency (PNA) news report.
To put things in perspective, posted below is an excerpt from the PNA news report. Some parts in boldface…
The World Bank on Tuesday said the Philippine economy is expected to continue to post strong growth but fully implementing key reforms to boost investments is crucial to sustain growth.
“We anticipate that the Philippine economy will continue to exhibit strong performance in the next few years,” World Bank country director for Brunei, Malaysia, the Philippines and Thailand Ndiame Diop said in briefing for the presentation of the Philippines Economic Update (PEU) December 2023 edition.
“This growth will be propelled by a healthy labor market and declining inflation, which will stimulate robust household consumption,” he said.
For this year, the World Bank expects the Philippine economy to grow by 5.6 percent and edge up to 5.8 percent in 2024.
The services sector is anticipated to be the main growth driver supported by the ongoing recovery of the tourism sector and the consistent performance of the information technology and business process outsourcing industry.
“We expect that the full implementation of several investment reforms will enhance the country’s competitiveness to attract foreign investment, strengthening the country’s global growth prospects,” said Diop.
The Philippine economy grew by 5.9 percent in the third quarter of the year, bringing the year-to-date economic expansion to 5.5 percent.
“Despite the challenging global environment that resulted in a slowdown for many countries in the region, the Philippines stands out as among the top performers,” Diop added.
He said this can be attributed to the country’s resilient domestic demand which helped mitigate the impact of external headwinds.
Inflation, meanwhile, is forecast to settle at 5.9 percent this year and ease to 3.6 percent in 2024.
Policy recommendations – Diop pointed out that moving forward, full implementation of key forms is needed to mitigate the impact of high inflation amid volatility in global commodity prices and high cost of borrowings to stimulate private investment, promote job creation and reduce poverty.
These include the amendments to the Public Services Act, Retail Trade Liberalization Act, the Foreign Investment Act and amendments to the implementing rules and regulations of the Renewable Energy Act allowing foreign ownership of renewable energy projects.
World Bank senior economist Ralph Van Doorn said that in the short term, domestic policy priorities include containing elevated inflation and providing assistance to vulnerable sectors.
Van Doorn said enhancing forecasting and planning to help stabilize food prices, reducing market volatility and ensuring a consistent and reliable food supply remains fundamental to reducing inflation in the short term.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the World Bank is correct with its findings about the economy of the Philippines?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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