Recently the World Bank (WB) revealed its forecast of stronger economic growth for the Philippines in the year 2025 although still below the projections of the government, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld report. Some parts in boldface…
THE WORLD BANK (WB) maintained its economic growth forecast for the Philippines this year but raised its 2025 growth projection, amid expectations of higher consumer spending and foreign investments.
In its latest East Asia and Pacific (EAP) Economic Update, the World Bank said it expects Philippine gross domestic product (GDP) to grow by 5.8% this year, the fastest in Southeast Asia along with Cambodia.
The Philippines and Cambodia are seen to expand faster than Vietnam (5.5%), Indonesia (4.9%), Malaysia (4.3%), Lao People’s Democratic Republic (4.0%), Timor-Leste (3.6%), Thailand (2.8%) and Myanmar (1.3%).
For 2025, the World Bank raised its GDP forecast for the Philippines to 5.9% from 5.8%.
However, the World Bank’s growth forecasts for the Philippines are lower than the government’s target of 6.5-7.5% for 2024 and 6.5-8% for 2025 to 2028.
“What has sustained growth in the Philippines, like much of the region, has been consumption and the recovery in services,” WB East Asia and Pacific Chief Economist Aaditya Mattoo said at a virtual briefing on Monday.
He noted foreign investment flows into the Philippines might increase after the government implemented significant reforms such as Republic Act No. 11659 or the Public Service Act, which allows full foreign ownership in key sectors such as telecommunications and airlines.
“(The reforms) should begin to pay off in terms of greater foreign investment, which though in the short run… the flows have been less strong than we would have expected,” Mr. Mattoo said.
Climate and geopolitical shocks, as well as elevated inflation and high interest rates are risks to the growth outlook.
“If there is a resurgence in inflation, for example in the United States, which might well see interest rates even higher for longer, that would certainly affect growth throughout the region as we have estimated,” he said.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the Philippine economy can grow stronger than the forecast of the World Bank for 2025?
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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