The World Bank has kept its growth forecast for the Philippines this year, with the economy expected to expand by 5.8 percent.
This is according to the Washington-based agency’s East Asia and Pacific April 2024 Economic Update released yesterday, as it also provides more optimism in the Philippine economy’s performance next year, forecast at 5.9 percent.
In its Global Economic Prospects report released in January, the World Bank then projected growth of 5.8 percent for the Philippines this year, while its estimate for 2025 is slightly lower versus its updated figure, at 5.8 percent.
Still, these estimates fall below the government’s growth assumption of 6.5 to 7.5 percent for 2024 and 6.5 to eight percent over the medium-term.
However, based on the recent report, the Philippines will be one of the fastest-growing economies in the East Asia and the Pacific region this year.
Among the covered economies, Palau is projected to have the fastest growth this year of 12.4 percent, while the Philippines and Cambodia both take the second spot.
“What has sustained growth in the Philippines like much of the region has been consumption and the recovery in services,” Aaditya Mattoo, World Bank East Asia and Pacific chief economist, said in a virtual briefing.
“And in the Philippines, I should also say the good news has been the fact that the government has implemented significant reforms like the Public Services Act, which should begin to pay off in terms of greater foreign investment,” he added.
In terms of risks and shocks, Mattoo said the biggest shock in countries like the Philippines is the huge vulnerability to climate risks.
“This region does contribute, especially in countries like China and Indonesia, through emissions to global climate change, but for the most part, the countries are more victims rather than perpetrators,” Mattoo said.
“So I think these big climate shocks necessitate a big investment in adaptation. These ranges from everything from early warning systems, in which Philippines has been a leader, but also through better investment in infrastructure and agriculture in more resilient structures that can weather these shocks,” he added.
