The Philippines, with a 5.3 percent growth rate, trails Vietnam at the lead with 6.6 percent, and Mongolia at 5.9 percent, but outpaces China, Cambodia, and Indonesia which are all seen to grow at 4.8 percent, the Pacific Islands at 2.7 percent, and Thailand at 2.0 percent.
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The Philippines is forecasted by the World Bank to be the fourth fastest-growing economy in East Asia and Pacific in 2025 and is projected to post second-fastest growth after Vietnam in 2026.
This, while the World Bank sees Philippine GDP this year and in 2026 keeping steady at 5.3 percent this year, and a notch higher, at 5.4 percent in 2026.
Philippine growth is forecasted to be above the regional average, with the East Asia and Pacific seen expanding by 4 percent through 2025, and 4.1 percent next year.
In a briefing over ZOOM on Tuesday, World Bank chief economist for East Asia and Pacific Aaditya Mattoo said that while the region’s growth remains relatively high, “it is slowing down.”
Significant factors
He cited three significant factors, namely, trade restrictions, increasing economic policy uncertainties, and global growth slowdown.
At a current growth rate of 4.8 percent, down from the previous year’s 5.0 percent. East Asia and Pacific is actually outperforming most of the rest of the world, Mattoo pointed out in his presentation on Tuesday, but creating more jobs and sustaining growth as the region navigates global uncertainties is slowing it down, he said.
The Philippines, at 5.3 percent growth, trails Vietnam at the lead with 6.6 percent, and Mongolia at 5.9 percent, but outpaces China, Cambodia, and Indonesia which are all seen to grow at 4.8 percent, the Pacific Islands at 2.7 percent, and Thailand at 2.0 percent.
Mattoo says the Philippines will benefit from robust domestic demand, supported by easing inflation, lower interest rates, and a strong labor market.
“Growth will also be sustained by public infrastructure investment exceeding 5 percent of GDP ad private investment spurred by reforms,” he said.
Recent reforms
Recent reforms in the country are expected to further enhance investment and productivity by opening key enabling sectors to greater competition including logistics and telecoms, and renewable energy.
The World Bank update on East Asia and Pacific also pointed to the Philippines as seeking to build labor force capabilities through the just enacted Enterprise-Based Education and Training framework which supports reskilling and upskilling.
Sustaining the Philippine growth momentum will require the implementation of these reforms, complemented by efforts to improve the business environment (for instance, it takes as much as 106 days to register a foreign firm) and a strong commitment to fiscal consolidation to safeguard the fiscal space needed to maintain infrastructure investment without compromising macroeconomic stability, the World Bank said.
