World Bank: Philippines will continue to be Southeast Asia’s fastest-growing economy

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The World Banks predicts the Philippines will continue to be the fastest-growing economy in Southeast Asia.

Gross domestic product (GDP) growth is expected to hit 6.7 percent this year and the next before moderating to 6.5 percent in 2020. The estimates, however, are all lower than the government’s 7.0-8.0 target.

On average, The Washington-based multilateral lender expects Philippine GDP to grow by 6.6 percent from 2018 to 2020, higher than Thailand’s 3.5 percent, Vietnam’s 6.5 percent, Indonesia’s 5.3 percent and Malaysia’s 4.9 percent.

Despite these improvements, the World Bank said Manila continues to face “vulnerabilities” in its financial sectors, with fast credit growth.

The Bank also reported that investment growth declined from earlier record-high rates in the Philippines, as front-loaded investment spending eased.

The World Bank last month upgraded its economic growth forecast for the Philippines to 6.7 percent from the previous estimate of 6.6 percent “to reflect recent economic trends.”
“If investment growth accelerates faster along with increased spending in public infrastructure, economic expansion can be even higher in 2017 and 2018 and exceed the current projection of 6.7 percent,” said Birgit Hansl, World Bank Lead Economist for the Philippines.

The country’s GDP registered a solid 6.9 percent growth rate in the third quarter of 2017, putting the economy on track to meet the government’s 6.5-7.5 percent full-year target.

The government will announce the 2017 fourth-quarter and full-year GDP performance on January 25.

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