A World Bank economist says the organisation is keeping its forecast for 2015 despite the Philippine economy’s lower-than-expected first-quarter turnout, the lender’s lead economist says the country’s growth story has improved.
The Washington-based lender overnight launched its Global Economic Prospects (GEP) report, which show that its growth forecast for the Philippines remaining at 6.5 percent for this year. The Bank forecast the same rate for next year and 6.3 percent in 2017.
On the sidelines of the Asia-Pacific Economic Cooperation (APEC) Senior Finance Officials’ Meeting in this town, World Bank economist Rogier van den Brink said the GEP forecast already incorporates the Philippines’ first-quarter growth of 5.2 percent, which came in below market consensus of at least 6 percent.
“We see the rest of the quarters of the year showing a different pattern. We know the agencies are working very hard to ramp up spending,” Van den Brink said, adding that the Philippines would benefit from a recovery in Japan and from cheap oil.
“But these relatively small changes in the growth numbers per se are secondary to the bigger story that matters. The country has established a clear trajectory towards growth that is more inclusive. Continuing reforms will ensure that the country will maintain this momentum,” he said.
Van den Brink said the Philippine economic story has changed from what it was as late as two decades ago when the recurring theme was a boom-and-bust cycle marked by slow growth, high inflation, current account deficits, budget deficits and soaring government debt.
“In the last several years, these issues are no longer a major concern. We are starting to see that the sustained high economic growth in recent years is translating into stronger job creation,” he said.
“Most of you will probably report on these growth forecasts for the Philippines in the context of more challenging environment, including the higher borrowing costs, lower prices for oil and other commodities, the easing of growth in China and other countries in the East Asia and the Pacific region, and so on. That’s fine. But if you do focus solely on these growth forecasts, you will miss on what I think is the more important and emerging story about the Philippines,” van den Brink said.
“For me, as an economist working for an institution committed to the eradication of extreme poverty, the real story is this: the Philippines has achieved macroeconomic stability, high growth rates, and, more recently, is starting to show the kind of growth which is more inclusive,” he said.