World Bank sees Philippine economy growing by 5-5.4%
The World Bank expects the Philippines to post another respectable growth this year, although at a slower pace as the economy returns to normalcy after an unusual expansion last year and as the external environment remains volatile.
In its latest publication, "Global Economic Prospects 2011," the World Bank has set its growth forecast for the Philippines for this year and next at a range of 5 to 5.4 percent. This is slower than its 6.8 percent growth projection for the Philippines for 2010.
"Crucial to this projection is the assumption that strong investor confidence, manifested in strong private investments and (favorable) consumer sentiment surveys, would be sustained by the government's efforts to step up reforms in governance and to improve overall investment climate," Eric Lee Borgne, senior economist of the World Bank for the Philippines, said during the launch of the publication.
The World Bank expressed confidence that domestic investments would sustain this year the rare increase seen last year.
Also, the multilateral institution expects remittances to continue growing in 2011, which will fuel the growth in household consumption.
The World Bank sees robust expansion of the business process outsourcing industry as foreign direct investments in this sector are seen to continue coming in.
The latest government report showed the Philippines growing by 7.5 percent in the first three quarters of 2010 over the year-ago level. This was the fastest seen in three decades and was driven partly by remittance-fueled consumption, government spending and domestic investments.
The growth last year was a sharp acceleration from the 1.1 percent increase registered in 2009.
A peculiar driver in 2010 was domestic investments, or fixed capital formation, which registered an 18.2 percent growth in the first three quarters.
Government spending last year, however, was unusually high because of the national elections.
