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THE World Bank raised its 2023 growth forecast for the Philippines to 6.0 percent from 5.6 percent, citing strong domestic demand
The Washington-based multilateral organization still expects a slowdown to follow, keeping its projections for 2024 and 2025 at 5.9 percent, figures released on Wednesday showed. “Despite weak external conditions, strong domestic demand will drive the Philippine economy to grow at 6.0 percent in 2023 and gradually decline over the medium term,” the World Bank said in its latest Philippine Economic Update.
“This upward revision reflects the latest global growth upgrade for 2023 and the continued strength in domestic demand,” it added.
“Private consumption growth will be supported by improved employment, steady remittances, and better consumer sentiments, amid an expected decline in headline inflation and winding down of pent-up demand.”
External risks to the outlook, the World Bank said, include the possibility of higher-than-expected global inflation, tighter global financing conditions and an escalation of geopolitical tensions.
Stubborn core inflation that could lead to larger-than-anticipated monetary tightening in many countries and the recent banking turmoil may unsettle global financial markets.
“From the domestic front, the threat of El Niño and supply chain bottlenecks may yet again raise food supply challenges and place upward pressure on food prices,” the World Bank added.
In an accompanying statement, the World Bank called for improvements in the efficiency of social protections, saying these were needed to protect the poor and the most vulnerable from economic shocks.
“It is essential to sustain improvements in social protection to help families, especially the poor and vulnerable, cope with economic difficulties as the country navigates the global slowdown, budget constraints, high prices of basic commodities, and climate-related risks,” World Bank Country Director Ndiame Diop said.
Ralph Van Doorn, World Bank senior economist, said risks from inflation would have to be addressed via measures such as reduced tariff and non-tariff barriers, enhanced domestic supplies, and bolstering agriculture with extension services, seeds, and fertilizers.
“In the face of escalating prices, a comprehensive strategy is needed to guarantee sufficient food for everyone,” he said.
“This entails a more productive agriculture and food system that is resilient to climate risks, serves all consumers, and competes effectively in both the local and global markets.” — Niña Myka Pauline Arceo
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