Economy of the Philippines – Page 27

Philippines October 2024 inflation rate settles at 2.3%

November 14, 2024November 5, 2024carlocarrasco

Recently it was announced that the inflation rate of the Philippines for October 2024 settled at 2.3%, according to a Philippine News Agency (PNA) news article. By comparison, the nation’s inflation rate was at 4.9% in October 2023.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

Inflation continued to settle within the government’s 2 to 4 percent target despite a slight uptick in October this year.

In a briefing on Tuesday, National Statistician Dennis Mapa said headline inflation during the month was at 2.3 percent, slightly higher than the 1.9 percent recorded in September this year. Inflation in October last year, however, was higher at 4.9 percent.

The latest data brings the national average inflation rate from January to October 2024 to 3.3 percent.

Mapa said the higher inflation in October was primarily influenced by the faster increase in food and non-alcoholic beverages at 2.9 percent from 1.4 percent in September 2024.

Despite the increase, the National Economic and Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP) are optimistic that inflation will remain within target this year.

“The latest inflation figures confirm that we are on track to keep inflation within target. The government is fully committed to ensuring price stability and protecting Filipino households from undue shocks,” NEDA Secretary Arsenio Balisacan said in a statement.

Balisacan assured the public that while recent weather disturbances posed challenges to the country’s food supply and logistics, the government will work “relentlessly to keep food available and prices steady, particularly for essential commodities.”

“With targeted support and streamlined food supply chains, we aim to ensure that food is affordable and accessible for Filipino families, especially those most vulnerable to price shocks when disasters hit us,” Balisacan said.

To mitigate the impact of natural disasters, Balisacan said the Department of Social Welfare and Development is implementing the Building on Social Protection for Anticipatory Action and Response in Emergencies and Disasters Program.

The program provides social safety nets and capacity-building measures to support affected communities.

The Philippine Atmospheric, Geophysical, and Astronomical Services Administration earlier forecast that La Niña will persist until the first quarter of 2025, with two to eight tropical cyclones expected to affect the country until April 2025.

“The President has mobilized all of government to ensure relief efforts are comprehensive and delivered on time. In addition, he has directed us to craft a robust solution to build the resilience of families and communities amid the onslaught of severe typhoons,” Balisacan said.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the inflation rate of the nation will end up between 2% to 4% for the final two months of the year?

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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Philippines 3rd quarter economic growth settles at 5.2%

November 12, 2024November 8, 2024carlocarrasco

Recently it was announced that the economy of the Philippines expanded by 5.2% in the 3^rd quarter of 2024, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Philippines remains one of the fastest growing economies in the region despite the slowdown in the third quarter of the year, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said on Thursday.

Philippine economic growth settled at 5.2 percent in the third quarter, lower than the 6 percent recorded in the same period last year.

The latest data brought the year-to-date gross domestic product (GDP) expansion to 5.8 percent, slightly under the 6-percent lower end of the government’s growth target for this year.

“Our economy continues to grow steadily; the latest GDP figures indicate continuous expansion. Of the countries that have reported their third-quarter GDP growth rates, we remain one of the fastest-growing Asian economies,” Balisacan said in a briefing at the Philippine Statistics Authority (PSA) office in Quezon City.

“We follow Vietnam, which posted a 7.4 percent growth rate, and are ahead of Indonesia (with 4.9 percent), China (4.6 percent), and Singapore (4.1 percent), ” he added.

Among the major economic sectors, industry and services grew by 5 percent and 6.3 percent in the third quarter.

National Statistician Dennis Mapa said, however, that agriculture, forestry, and fishing sector contracted by 2.8 percent.

Balisacan explained that the contraction in the agriculture sector was due to the effects of El Niño, seven typhoons, and Habagat. He added the fishing ban in Cavite and Bataan due to the oil spill, and cancellation of fishing trips due to bad weather conditions, also affected fishing and aquaculture.

“Likewise, livestock production decreased due to the recent outbreaks of African swine fever (ASF), such as in Batangas last August,” he said.

Balisacan said the successive typhoons also suspended classes and work in government and some private offices, resulting in administrative delays.

Household final consumption expenditure grew by 5.1 percent, which Balisacan attributed to the slower consumer price inflation. Government final consumption expenditure slowed to 5 percent from 6.7 percent.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines will grow much faster in the 4^th quarter?

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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Computer and Communications Industry Association (CCIA) expresses concern over Philippines’ digital tax and regulations

November 6, 2024October 28, 2024carlocarrasco

The Computer and Communications Industry Association (CCIA) – a Washington, DC-based group whose members include several prominent technology companies – expressed concern over the Philippines’ 12% value-added tax (VAT) on foreign digital services plus rules on online transactions, according to a Manila Bulletin news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news report. Some parts in boldface…

US-based tech giants are worried that the 12-percent value-added tax (VAT) to be collected from digital services providers (DSPs), plus more stringent rules on internet transactions under two new Philippine laws, could make it harder for global firms to operate here.

While this law imposing VAT on DSPs does not discriminate between US non-resident DSPs (or other foreign DSPs) and local DSPs, industry is concerned that (its) implementing rules and regulations, which are currently being developed, could impose unworkable requirements on foreign DSPs similar to what has happened for [non-resident] income-tax payers,” the Washington, DC-based Computer and Communications Industry Association (CCIA) told the Office of the United States Trade Representative (USTR) in an Oct. 17 submission for its 2025 National Trade Estimate (NTE) Report on Foreign Trade Barriers, which also covers digital trade.

CCIA is referring to Republic Act (RA) No. 12023 enacted into law by President Ferdinand R. Marcos Jr. last October, whose implementing guidelines are due before this year ends in order to collect VAT next year.

CCIA’s member-companies include Amazon, Apple, Cloudflare, Coupang, eBay, Google, Intel, Meta, Opera, Pinterest, Rakuten, TSMC, Uber and X (formerly Twitter), among other global tech firms.

Arlington, Virginia-based Consumer Technology Association (CTA) also flagged RA 12023 as a barrier to US electronic commerce in its USTR submission, citing that this new Philippine law encompasses not only digital goods and marketplaces but also cloud services as well as online advertising, media and search engines.

Back in 2021, the Washington-based multilateral lender International Monetary Fund (IMF) warned that slapping digital services taxes (DSTs) may “open the door to retaliatory trade measures” from the US, as it did with India’s DST.

CCIA pointed out to the USTR that implementation of the Income Tax Convention of 1976, in which both the Philippines and the US are parties, has been “challenging” due to “complex and burdensome documentation procedures” or so-called request for confirmation (RFC) required by the Bureau of Internal Revenue (BIR) from income taxpayers.

“The BIR has not established standard processing timelines, and businesses are subsequently required to wait indefinitely without any commitment toward a resolution of the filing. These requests are required of all US non-resident service providers operating in the Philippines and, therefore, this policy is not limited to digital services and impacts members of all industries seeking to provide their services and goods to the Philippine market,” CCIA noted.

CCIA added that the BIR revenue memorandum circular (RMC) issued in January of this year “added further confusion to income-tax obligations of non-resident suppliers of cross-border services.”

Referring to RMC No. 5-2024, CCIA said it “appears to depart from established principles of income taxation of cross-border services (using the place where the services are performed to determine if the transaction is income-taxable) and treats the place of receipt of the services as being crucial in determining the taxability of the transaction.”

As such, CCIA called upon the Philippine government and the BIR, in particular, to hold comprehensive industry consultations, “including with US non-resident service providers, to clarify the income-tax position under Philippine law in line with well-recognized and established international practices.”

Like CCIA, the also Washington-based National Foreign Trade Council (NFTC) bewailed in its comment to the USTR that “there is significant ambiguity on how long the BIR will take to review the RFC and there is no guarantee of a positive outcome.”

“Such requests have to be made by each and every income payor (customers) of US non-resident service providers selling to the Philippines,” NFTC lamented.

Also, CCIA expressed concern about the Internet Transactions Act signed by President Marcos Jr. last year.

“Industry is concerned that the [Internet Transactions Law] would introduce obstructive requirements on electronic commerce platforms to have regulatory oversight such as mandatory collection of valid business certificates of merchants and subsequent submission to the government authority,” CCIA explained

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the national government should respond to the concerns of the CCIA? Do you think the digital tax and current laws will turn away technology giants?

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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Economy of the Philippines to keep growing above 6% in 2024 and 2025

November 1, 2024October 24, 2024carlocarrasco

Recently, an economist predicted that the economy of the Philippines will keep growing above 6% this year and next year, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Philippine economy is expected to remain one of the fastest growing economies in the region, with growth likely settling at above 6 percent for 2024 and 2025.

In his economic and market outlook released on Tuesday, BPI senior vice president and lead economist Emilio Neri Jr. said economic growth will likely hit 6.1 percent this year and further accelerate to 6.3 percent in 2025.

“The Philippine economy has been resilient despite significant headwinds like severe El Niño and devastating typhoons, still managing to grow by 6% in the first half of 2024,” Neri said.

“Looking ahead, the Philippine economy will likely continue to outperform in the region, supported by its strong consumer base,” he added.

Neri expects headline inflation to ease to 3.2 percent in 2024 and further decelerate to 2.8 percent in 2025.

“Inflation is expected to be more manageable in the coming year given the improving prospects of food supply. With El Niño now behind us and the potential increase in production, along with tariff reductions, rice may become more affordable,” he said.

Neri said lower inflation may help boost consumption in the coming year, while election-related spending could also further stimulate economic activity.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines has enough momentum to exceed the growth forecasts of the economists for 2024 and beyond? Do you think the Philippines can do a better job on attracting more foreign investors soon?

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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Las Piñas City Councilor Santos asks DENR to authorize P103.8 billion Las Piñas-Parañaque reclamation plan

October 31, 2024October 24, 2024carlocarrasco

In recent times, Las Piñas City Councilor and congressional candidate Mark Santos formally asked the Department of Environment and Natural Resources (DENR) to authorize the Las Piñas-Parañaque Coastal Bay Reclamation Project of the national government which is worth over P100 billion, according to a Manila Standard news report.

To put things in perspective, posted below is an excerpt of the news report of the Manila Standard Some parts in boldface…

Las Piñas City Councilor and congressional candidate Mark Anthony Santos asked the Department of Environment and Natural Resources (DENR) to authorize the P103.8-billion Las Piñas-Paranaque Coastal Bay Reclamation Project of the national government.

Santos said the clearance to proceed with the project remained unresolved by the members of DENR’s Protective Area Management Board, despite the SC decision three years ago.

“The status of the project remains at the detailed engineering stage,” he said.

Santos said that in an en banc decision on Oct. 21, 2021, the Supreme Court, voting 11-2, approved the reclamation project of around 530 hectares of the Manila Bay coastline in Las Piñas- Parañaque, ruling that the supposed threat to environment was not sufficiently established.

Alltech Contractors proposed the project to develop 321.26 hectares of land in Las Piñas and 174.88 hectares in Parañaque, both along the coastline of Manila Bay in 2009. The Philippine Reclamation Authority approved the project in 2010 subject to compliance to environmental rules.

Alltech submitted an amended environmental performance report management plan (EPRMP) in December that year and expanded the project to cover 203.43 hectares in Parañaque and 431.71 hectares in Las Piñas.

The DENR-Environmental Management Bureau issued the environmental compliance certificate (ECC) for the project In March 2011, after Alltech Contractors submitted scientific and expert studies that assessed the potential flooding and flushing impact that may arise from the coastal bay project.

The SC decision suggests that the city government of Las Piñas may proceed with the reclamation project despite residents’ objections, said Santos.

Santos said the city councils of Las Piñas and Parañaque issued the corresponding resolutions authorizing their respective city mayors to explore the proposal under a joint venture agreement (JVA).

The cities of Las Piñas and Parañaque eventually accepted Alltech’s proposal, and the parties executed their respective JVAs, he said.

Let me end this piece by asking you readers: If you are a resident of Las Piñas City, what is your reaction to this development? Do you think it is high-time for the reclamation in Las Piñas to proceed?

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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Ayala-Mitsubishi deal likely to boost GCash IPO

October 30, 2024October 21, 2024carlocarrasco

If things go well, the recent deal made between Ayala Corp. and Japan’s Mitsubishi Corp. will likely boost the anticipated initial public offering (IPO) of e-wallet entity GCash, according to a BusinessWorld news report referencing analysts.

To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…

THE RECENT deal between Ayala Corp. and Japan’s Mitsubishi Corp. is likely to increase the valuation of the anticipated initial public offering (IPO) of the electronic wallet GCash, according to analysts.

On Friday last week, Ayala Corp. announced that it was selling its 50% stake in AC Ventures Holding Corp. (ACV) to Mitsubishi for a minimum of P18.4 billion.

ACV owns 13% of Globe Fintech Innovations, Inc. (Mynt), which has two fintech companies, G-Xchange Inc., the operator of GCash, and Fuse Lending, a tech-based microlender.

“The deal reinforces the value of Mynt for its future IPO. With key investors coming in at a valuation of around $5 billion, Mynt is poised for an IPO at a much higher valuation,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

GCash previously said it was planning an IPO but would wait for a more favorable market.

According to Mr. Colet, the IPO could happen as early as next year depending on market conditions.

“I can see the IPO within the next two to three years. Perhaps as soon as next year if market conditions are very good,” he said.

“So far, it seems Globe wants a local IPO for Mynt. But it would be better if they do a dual listing in the Philippines and a larger stock market to get the best of both worlds,” he added.

Globalinks Securities and Stocks, Inc. Trader Mark V. Santarina said in a Viber message that the deal helps GCash’s international expansion plans.

GCash services are available in 16 countries, including the United States, United Kingdom, United Arab Emirates, Italy, Australia, Canada, Germany, and other Asian countries.

“For GCash, Mitsubishi’s entry paves the way for potential international expansion, particularly into Japan, and may boost its service offerings in microlending and financial technology,” he said.

“While GCash is considering overseas listings for its IPO, there is still hope it may choose to list on the Philippine Stock Exchange (PSE) instead, which would be a significant win for the local market,” he added.

AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message that the deal could help improve other Ayala ventures.

“With its entry into ACV, Mitsubishi is not only buying into GCash but also into other ventures under ACV like Gogoro and Zalora. We believe Mitsubishi’s expertise can help improve these businesses and maybe even accelerate the expansion of GCash into Japan,” he said.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think an IPO of GCash could happen sometime in 2025? Are you an investor waiting for the GCash IPO to happen?

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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To lure younger investors, BPI Wealth to launch new mutual fund

October 29, 2024October 21, 2024carlocarrasco

BPI Wealth – the wealth management arm of the Bank of the Philippine Islands (BPI) – will establish a new mutual fund to lure in young and tech-savvy investors, according to a Manila Bulletin business news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news report. Some parts in boldface…

Amid favorable conditions for long-term investments, the wealth-management arm of Ayala-led Bank of the Philippine Islands (BPI) will roll out before this year ends a new mutual fund eyeing young and tech-savvy investors.

BPI Wealth personal wealth head Irene Ang told a press briefing on Friday, October 18, that the forthcoming BPI Wealth Builder Multi-Asset Mutual Fund Inc. is expected to be approved “soon” by the Securities and Exchange Commission (SEC), which regulates mutual funds, for it to be sold to the public.

This first-of-its-kind balanced, global-based and peso-subscription and -redemption fund aims to convince millennials and the Gen X generation in the country to invest and prepare for their retirement, Ang said.

Among the innovative and unique features of this mutual fund include availability for a minimum of only P1,000; accessibility on BPI’s online platforms and accredited channels to conveniently open an investment account, monitor investments, and receive cumulative rewards and benefits at no extra cost; as well as an automated and automatic top-up system allowing additional investments of at least P100 monthly.

Ang is optimistic that up to P1-billion investments in their upcoming newest mutual fund would be “easy.”

BPI Wealth president and chief executive officer (CEO) Maria Theresa D. Marcial noted that among their investors, those who onboarded via digital channels continued to engage more regularly than branch-opened accounts.

“We should push more into digital initiatives,” said Marcial, who is spearheading BPI’s “Wealth Wellness Month” this October to promote financial inclusion and literacy as well as opportunities for small investors.

Marcial disclosed that as of end-September, BPI Wealth’s assets under management (AUM) rose to a new high of P1.4 trillion, from P1.2 trillion in end-2023.

On top of the earlier goal of 20-percent AUM increase for this year, Marcial said a further 15-percent growth next year will be “reasonable.”

BPI Wealth targets P3 trillion in AUM by 2026.

Marcial cited that while mutual funds and other assets experienced a roller-coaster ride of ups and downs during the past three years due to global financial conditions, the clarity in the ongoing monetary policy easing here and abroad this year has improved prospects.

“We’re seeing markets becoming more buoyant, and fund managers are becoming more constructive across asset classes,” she said.

“Bonds are expected to do better, as interest rates go lower. And because interest rates are lower… so [in] equity we’re seeing some renewed interest,” she added.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think BPI Wealth’s newest move makes a lot of sense with today’s economic environment? Do you think a lot of millennials are willing to engage in investments?

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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Office market shrinks in connection with nationwide POGO ban

October 24, 2024October 14, 2024carlocarrasco

It has been months since the nationwide ban on POGOs (Philippine Offshore Gaming Operators) was declared and this resulted in the shrinking of the office market as demand for office spaces weakened, according to a Manila Bulletin business news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin report. Some parts in boldface…

The total ban on the Philippine Offshore Gaming Operations (POGO) contributed to a significant decrease in the demand for office spaces in the third quarter of the year, property brokerage firm Leechiu Property Consultants (LPC) said.

In a statement, LPC said office take-up from July to September dropped by 21 percent to only 215,000 square meters (sqm), with the POGO industry’s downsize and other tenants’ transfer to newer spaces contributing to an increase in vacancies.

The POGO industry was one of the main drivers of the residential and office markets at the time of the Duterte administration, until getting totally banned by President Ferdinand Marcos Jr. this year amid their venture into illicit areas.

“The grave abuse and disrespect to our system and laws must stop. We need to stop them and their abuse to our country,” Marcos Jr. said.

Despite the decline in office take-ups this quarter, LPC said that the country is on track to surpass the one million sqm office demand registered last year.

“The year-to-date demand for office space has reached 900,000 sqm, marking an 11 percent increase over the first three quarters of 2023,” it said.

In terms of leasing pattern, LPC said tenants are now shifting from higher-quality buildings to offices that can offer better and larger spaces.

In terms of location, the bay area continues to be the top choice, with office take-up driven primarily by government agencies occupying 80,000 sqm in the first nine months of the year. Outside Metro Manila, Cebu remains the top provincial market with the higher take-up coming from the IT-BPM industry.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the shrinking of the office market is temporary at best and a recovery could begin before the end of the year? Do you favor the ban on POGOs?

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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Philippines achieved double-digit tax collection growth in first 9 months of 2024

October 23, 2024October 11, 2024carlocarrasco

Recently the Department of Finance (DOF) announced that the Philippines achieved double-digit growth in the January-September stretch of 2024, according to a Manila Bulletin business news report.

To put things in perspective, posted below is an excerpt from the Manila Bulletin report. Some parts in boldface…

The Department of Finance (DOF) reported that collections from the government’s two main tax agencies showed strong double-digit growth in the first nine months of the year.

The Bureau of Internal Revenue (BIR) and the Bureau of Customs collectively gathered P2.771 trillion from January to September 2024, a 10 percent increase from P2.518 trillion in the same period last year.

Of this total, the BIR, which is responsible for nearly 70 percent of the government’s annual revenue, collected P2.08 trillion by the end of September—a 12 percent increase compared to P1.858 trillion the previous year.

This nine-month collection accounted for 73 percent of the BIR’s full-year target of P2.842 trillion.

In contrast, the Customs bureau raised P690.8 billion as of September, a modest 4.6 percent increase from P660.39 billion in the previous year. This amount represents 73.5 percent of its annual target of P939.7 billion.

In May, the Development Budget Coordination Committee (DBCC) revised its tax collection projections for the BIR and Customs downward, citing expectations of slower economic growth this year.

According to the DBCC’s 2024 Quarterly Fiscal Program, approved on May 23, the BIR and Customs are now expected to collect P3.788 trillion this year, a reduction of 5.6 percent from the original target of P4.014 trillion.

The BIR’s full-year collection target was adjusted down by 6.7 percent from the previous goal of P3.055 trillion, while the Customs bureau’s target was lowered by 2 percent from the earlier estimate of P959 billion.

Budget Secretary Amenah F. Pangandaman, who chairs the DBCC, explained to the Manila Bulletin that these adjustments were primarily driven by a lower-than-expected economic growth outlook, among other factors.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the BIR will be able to collect P3 trillion by the end of the year? Do you think the recent tax collection reports suggest that the national economy will grow stronger in the next two years?

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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World Bank (WB) sees strong Philippine economic growth in 2024 and 2025

October 22, 2024October 11, 2024carlocarrasco

By citing positive factors in its latest report, the World Bank (WB) raised its Philippine economic growth forecasts for 2024 and 2025, 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) has raised its economic growth forecasts for the Philippines for this year and in 2025, driven by improved service exports and public investments.

But weak consumption and investment will keep the country’s growth below pre-pandemic levels, it said.

In its East Asia and Pacific Economic Update, the Washington-based multilateral lender now expects the Philippine economy to grow by 6% this year from 5.8%.

The Philippines could become the second-fastest growing economy in Southeast Asia, behind Vietnam (6.1%) and ahead of Cambodia (5.3%), Indonesia (5%), Malaysia (4.9%), Laos (4.1%), Timor-Leste (3%), Thailand (2.4%) and Myanmar (1%).

“Among the larger countries, only Indonesia is expected to grow in 2024 and 2025 above pre-pandemic levels, while growth in Malaysia, the Philippines, Thailand and Vietnam is expected to be below those levels,” the World Bank said.

For 2025, it forecasts Philippine economic output to expand by 6.1% from 5.9% in its April forecast.

The lender’s growth forecasts for the Philippines are at the low end of the government’s target of 6-7% for 2024 and below the 6.5-7.5% goal for next year.

The Philippine economy grew by 6.3% in the second quarter, faster than 5.8% in the previous quarter and 4.3% a year ago. In the first half, growth averaged 6%.

The World Bank said service exports and public investment have supported Philippine economic growth, but consumption and private investment remain weak.

From 2024 to 2026, the lender expects the Philippine economy to grow by an average of 6%, it said in a separate report.

This will be supported by remittances, jobs, slower inflation and external demand. However, weaker growth in China, global economic slowdown and weather disruptions are risks to the outlook.

It also projects the government’s budget deficit to fall to 4.6% of gross domestic product (GDP) by 2026 due to improved state spending. This is slightly below the 4.73% target for the year.

Better revenue collection will be supported by key tax measures, improved tax administration and higher dividends from state-owned corporations, the World Bank said.

The lender also raised this year’s growth forecast for the East Asia-Pacific region to 4.8% from 4.5% in April.

“Most East Asia-Pacific economies are expected to experience robust growth in 2024, supported by private consumption and a positive external environment,” according to the report. In 2025, the region is expected to grow by 4.4% from its previous forecast of 4.3%.

However, domestic demand is expected to moderate in the Philippines, Indonesia and Thailand, while private investment growth remains weak across the region.

“Investment growth has been declining across most countries in the region over the past two decades, with particularly sharp drops in China, Indonesia, Malaysia, and more recently, the Philippines.”

It also noted that the Philippines and Malaysia have kept a conservative fiscal stance due to their higher structural deficit this year.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the Philippines has enough momentum to exceed the WB’s economic growth forecasts for 2024 and 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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