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In its latest Philippines Economic Update released last April 11, the World Bank assessed that the “Philippines sustains strong growth amidst difficult global environment.”
Furthermore, World Bank also noted that ‘careful macroeconomic management and structural reforms’ are keys to maintaining resilience in East Asia, the Pacific Region and the Philippines.
In her opening remarks for the Philippine Economic Update briefing, World Bank’s Country Director for the Philippines Mara Warwick delivers the main messages of the Economic Update as follows:
• The Philippines remains among the “fast-growing countries” in East Asia and the Pacific Region despite the challenging global environment.
• In the past years, the Philippines continues to deepen macroeconomic stability, promote transparency, and has invested in infrastructure and services in aid to poor and vulnerable families.
• As it suggested, the Philippines can make further progress in poverty reduction by enhancing competition in sectors that can create more and better jobs such as rice shipping and telecommunications. World Bank also suggested that simplifying business regulations could be an important factor in creating more and better jobs as it will encourage more entrepreneurs to set up shop and to improve people’s access to land through better adjudication of land rights.
In the update, the World Bank also noted that growth in developing countries in East Asia and the Pacific “remained resilient and is expected to ease only modestly during 2016-2018.”
Through its new report, World Bank also suggested that countries subjected to this outlook “should continue to prioritize monetary and fiscal policies that reduce vulnerabilities and strengthen credibility, while deepening structural reforms.”
“Growth in developing East Asia is expected to ease from 6.5 percent in 2015 to 6.3 percent in 2016 and 6.2 percent in 2017-18. The forecast reflects China’s gradual shift to slower, more sustainable growth, expected to be 6.7 percent in 2016 and 6.5 percent in 2017, compared with 6.9 percent in 2015,” the World Bank reported.
“Developing East Asia and Pacific continues to contribute strongly to global growth. The region accounted for almost two-fifths of global growth in 2015, more than twice the combined contribution of all other developing regions,” Victoria Kwakwa , incoming World Bank East Asia and Pacific Regional Vice President said in the report.
“The region has benefited from careful macroeconomic policies, including efforts to boost domestic revenue in some commodity-exporting countries. But sustaining growth amid challenging global conditions will require continued progress on structural reforms,” Kwakwa added.
According to World Bank, it’s East Asia and Pacific Economic Update examines a region’s growth prospects through this challenging setting:
• Slow growth in high income countries
• A broad slowdown across emerging markets
• Weak global trade
• Persistently low commodity prices
• Increasingly volatile global financial markets
Based on its report, excluding China, the East Asia and Pacific regions’ developing countries grew by 4.7 percent in 2015, and according to World Bank, this pace of growth will pick up slightly to 4.8 percent in 2016 and 4.9 percent in 2017-2018 as driven by growth in the large Southeast Asian economies.
“However, the outlook for individual countries varies, depending on their trade and financial relationships with high-income economies and China, as well as their dependence on commodity exports.”
.“Among the large developing Southeast Asian economies, the Philippines and Vietnam have the strongest growth prospects, both expected to grow by more than 6 percent in 2016,” the update added.
According to World Bank, the Philippines is projected to grow 6.4 percent in 2016 before slightly lowering to 6.2 percent in 2017 – this growth was accounted to strong private consumption and election spending.
In Indonesia however, World Bank noted that their growth forecast is as 5.1 percent in 2016 and 5.3 percent in 2017, as reflected by the success of their recent reforms and implementation of an ambitious public investment program.
In conclusion, the World Bank urged governments to boost transparency and strengthen accountability. It also urges countries to reduce barriers to regional trade.
“And the report stresses that the benefits from the digital revolution will be maximized by developing regulatory regimes that favor competition, and by helping workers adapt their skills to the demands of the new economy.”