The World Bank expects Philippine economic growth to settle below pre-pandemic levels at 6 percent this year and 6.1 percent in the next due to the country’s slower adoption of technologies and global trade uncertainties.
The figures are based on the global institution’s East Asia and the Pacific Economic Update: Jobs and Technology report it released Monday.
The World Bank’s new forecasts, however, are better than the 5.8 percent and 5.9 percent it estimated in April for 2024 and 2025, respectively.
Still, the bank’s outlooks shared this month are slower than the 6.7 percent economic growth the country posted in 2017 or before the Covid-19 pandemic, and below the government targets of 6 to 7 percent this and 6.5 to 7.5 percent in the following year.
Growth is slowing
“Countries in the East Asia and the Pacific Region continue to be an engine of growth for the world economy,” World Bank vice president for East Asia and the Pacific Manuela Ferro said.
“However, growth is slowing. To sustain strong growth over the medium-term, countries in the region must be proactive in modernizing and reforming their economies to navigate changing patterns of trade and technological change,” she said.
Specifically, Ferro said the Philippines still needs to catch up with advancements in robotics and artificial intelligence (AI) to seize evolving job opportunities from multinational firms.
World Bank’s data showed only 10 percent of jobs in less advanced economies involve AI-related tasks while the advanced economies are already using AI in 30 percent of their jobs.
Robotics leave 1.4M low-skilled people jobless
Meanwhile, the rise of robotics already left 1.4 million low-skilled people jobless in Southeast Asia from 2018 to 2022, as 2 million new jobs involving this field of technology went to high-skilled workers.
“East Asia’s development model — relying on open global markets and labor-intensive production — is being challenged by trade tensions and new technologies,” World Bank East Asia and Pacific chief economist Aaditya Mattoo said.
Aside from technological evolution, World Bank’s data on imports to China and Vietnam’s exports to the United States signal limited global trade growth or a “one-way connector” strategy amid geopolitical tensions.
The data revealed imports to China only grew by 2.8 percent in the first seven months of this year compared to nearly six percent each year over the past decade.
China’s import demand slowing
“China had pulled other countries along through its import demand, but that is now growing even slower than its gross domestic product,” World Bank’s report said.
Meanwhile, Vietnam seems to be focusing exports to the United States amid the latter’s rift with China due to alleged intellectual property theft and espionage.