World Bank upgrades PH economic forecast to five percent
By Reden D. Madrid
The World Bank increased its economic growth outlook for the Philippines, amidst its downgrade on powerhouse economies of East Asia.
In its East Asia and Pacific Economic Data Monitor report released on October 9, the World Bank upgraded the economic growth of Philippine economy by the expansion of the gross domestic product to five percent from the original 4.6 percent.
The World Bank’s 4.6-percent growth forecast for the country is a higher revision from the original start up forecast for 2012 of 4.2 percent, which was influenced by the buoyed up by the economic expansion of 6.4 percent in the first three months of 2012.
The Philippines’ GDP grew 7.6 percent in 2011 from the lackluster 3.9 percent in 2010.
The World Bank, however, projected a lowly 7.2 percent of the East Asain and Pacific Region including China, down from last year’s 8.3 percent economic growth.
The World Bank said higher government spending, robust private consumption buoyed by strong remittances from overseas Filipino workers, and strong credit growth prompted the World Bank to increase its positive outlook for the Philippines.
“Ample liquidity has been feeding buoyant credit growth in the Philippines and Indonesia – both countries with low credit over GDP and loan over deposit ratios - and has reignited credit growth in China in recent months,” it said.
However, the fiscal policies in the region are still limited, the World Bank said.
“In the Philippines, the acceleration of government infrastructure spending has contributed to the strong growth performance in the first half, while revenue growth is supported by tax administration reforms as well as strong GDP growth,” the World Bank report said.
The GDP of the country expanded 6.1 percent in the first six months of 2012, way higher than the 4.2 percent it experienced in the same period last year. In the second quarter of 2012, the economy grew to 5.9 percent from the 3.6 percent in 2011.
The firm Philippine service sector remained the main driver of economic growth, supported by the sustained growth of manufacturing and the rebound of construction due to increased public spending on infrastructure.
The upgrade this year came after the increased growth forecast of the Asian Development Bank (ADB) which upgraded to 5.5 percent in 2012 from the original 4.8 percent projection.
“With increased government spending and investments spurring economic activities in the second quarter, the country’s GDP sustained its growth track as it expanded by a better-than-expected 6.1 percent in the first semester,” ADB said.
The World Bank increased its economic growth outlook for the Philippines, amidst its downgrade on powerhouse economies of East Asia.
In its East Asia and Pacific Economic Data Monitor report released on October 9, the World Bank upgraded the economic growth of Philippine economy by the expansion of the gross domestic product to five percent from the original 4.6 percent.
The World Bank’s 4.6-percent growth forecast for the country is a higher revision from the original start up forecast for 2012 of 4.2 percent, which was influenced by the buoyed up by the economic expansion of 6.4 percent in the first three months of 2012.
The Philippines’ GDP grew 7.6 percent in 2011 from the lackluster 3.9 percent in 2010.
The World Bank, however, projected a lowly 7.2 percent of the East Asain and Pacific Region including China, down from last year’s 8.3 percent economic growth.
The World Bank said higher government spending, robust private consumption buoyed by strong remittances from overseas Filipino workers, and strong credit growth prompted the World Bank to increase its positive outlook for the Philippines.
“Ample liquidity has been feeding buoyant credit growth in the Philippines and Indonesia – both countries with low credit over GDP and loan over deposit ratios - and has reignited credit growth in China in recent months,” it said.
However, the fiscal policies in the region are still limited, the World Bank said.
“In the Philippines, the acceleration of government infrastructure spending has contributed to the strong growth performance in the first half, while revenue growth is supported by tax administration reforms as well as strong GDP growth,” the World Bank report said.
The GDP of the country expanded 6.1 percent in the first six months of 2012, way higher than the 4.2 percent it experienced in the same period last year. In the second quarter of 2012, the economy grew to 5.9 percent from the 3.6 percent in 2011.
The firm Philippine service sector remained the main driver of economic growth, supported by the sustained growth of manufacturing and the rebound of construction due to increased public spending on infrastructure.
The upgrade this year came after the increased growth forecast of the Asian Development Bank (ADB) which upgraded to 5.5 percent in 2012 from the original 4.8 percent projection.
“With increased government spending and investments spurring economic activities in the second quarter, the country’s GDP sustained its growth track as it expanded by a better-than-expected 6.1 percent in the first semester,” ADB said.