Follow Philippines Investment Immigration and stay updated on the Philippine economy: The World Bank forecasts that the Philippines' Gross Domestic Product (GDP) will grow by 6.5% this year and next, which is lower than the 6.7% forecast in October 2014, but still better than the overall forecast for developing countries in the region.
The World Bank released its East Asia and Pacific Economic Update today, stating that if the Philippine government executes its national budget and the reconstruction plan for areas affected by Typhoon Haiyan as scheduled, GDP growth could reach 6.5% this year. With next year being a presidential election year, election spending is also expected to help the Philippines maintain a 6.5% GDP growth rate. Subsequently, the Philippines' GDP is expected to drop slightly to 6.3% in 2017.
Strong remittances from overseas Filipino workers, falling international oil prices, and rising business sentiment are all drivers of the Philippines' GDP growth. However, the country must also accelerate the pace of reform to transform high growth into "inclusive growth" that benefits the poor. The World Bank suggests that the Philippine government needs to increase investment in infrastructure, health, and education, strengthen the creation of a level playing field, remove red tape to promote employment, and protect property rights to encourage investment.
For the East Asia and Pacific region as a whole, the Washington, D.C.-based World Bank forecasts GDP growth of 6.7% in 2015 and 2016, down from 6.9% in 2014 and lower than the previous forecasts of 6.9% and 6.8% for these two years, respectively.
The report states that even with the benefits of low oil prices and the recovery of developed countries, the pace of economic growth in developing countries in the region will slow slightly. Although the East Asia and Pacific region is thriving, it still faces many short-term and long-term risks, including the potential impact of a stronger U.S. dollar, rising U.S. interest rates, and economic slowdowns in Japan, the Eurozone, and mainland China.
The World Bank forecasts that the region's GDP growth will be 6.6% in 2017.
