Philippines Economic Update, April 2019 : Safeguarding Stability, Investing in the Filipino
The economic growth outlook remains positive. The country’s economic growth is projected to reach6.4 percent in 2019 and slightly edge up to 6.5 percent in 2020 and 2021, as inflation is expected to decline, and spending due to the upcoming midterm...
| Format: | Report |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/442801553879554971/Philippines-Economic-Update-Safeguarding-Stability-Investing-in-the-Filipino http://hdl.handle.net/10986/31505 |
| Summary: | The economic growth outlook remains
positive. The country’s economic growth is projected to
reach6.4 percent in 2019 and slightly edge up to 6.5 percent
in 2020 and 2021, as inflation is expected to decline, and
spending due to the upcoming midterm elections is likely to
boost private consumption growth. Public investment growth
is expected to be tempered in the first half of 2019 due to
delays in approving the public budget, and is projected to
recover in the second half of 2019. Export growth will
likely remain weak, as global economic and trade growth are
projected todecelerate in the near term, due to persisting
trade tensions. The further strengthening of the U.S.
dollar, possible increases in U.S. interest rates, and
geopolitical uncertainties continue to be the main external
downside risks to the economic outlook. Key short-term
priorities to sustain the Philippines’ rapid economic growth
include prudently managing fiscal and current account
balances and adopting policies to preserve consumer and
business confidence. As the government continues to expand
public investment to address the country’s infrastructure
gap, it is crucial toraise additional revenue to preserve
fiscal sustainability, particularly as financing conditions
may tighten globally. In addition, the trade deficit is
estimated to remain wide, as export growth will likely stay
weak while import growth is expected to accelerate. Given
that global financing conditions may tighten, the government
needs to closely monitor the performance of remittances,
service exports, and foreign direct investment to prevent an
external funding gap. In the long term, in addition to
sustained efforts to build human capital, initiatives to
address structural constraints are needed to accelerate
inclusive growth. Improved market competition, accelerated
investment, and improved labor market conditions to boost
both productivity and economic growth will be essential.
This calls for urgent actions on a couple of policy
initiatives including revisiting foreign participation in
the domestic market, implementing reforms to improve doing
business, and reducing non-tariff barriers to boost trade.
For instance, passing the Public SectorAct Amendment bill
will entice foreign investments and bring competition to the
transportation andtelecommunications sectors that are key
backbone services whose efficiency directly affects overall productivity. |
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