World Bank cuts 2017 growth projection to 6.6% for Philippines
The World Bank has slashed its growth projection for the Philippines to 6.6 percent for this year due to slower-than-expected implementation of public investment projects.
In the April outlook, the Washington-based lending agency projected 6.9 percent gross domestic product for the Philippines for 2017.
"The Philippines and Vietnam will continue to have the strongest growth prospects although the Philippines will grow slighly less rapidly than what we expected due to slower than expected implementation of public investment projects," said Sudhir Shetty, World Bank chief economist for East Asia and Pacific region, in a video conference from Bangkok in the launching of the October 2017 editions of the East Asia and Pacific Economic Update.
For 2018, World Bank also trimmed its growth projection from 6.9 percent in April to 6.7 percent.
Asked if the political issues in the Philippines, such as the extrajudicial killings of drug suspects and the bickering between and among the three branches of government could affect the growth prospects for the country, Shetty said, "we don't in our analysis see any impact of this as yet.
"As we said, the reason, well, on the one hand the Philippine economy will be one of the fastest growing in this region and certainly among the largest economies and the fact that we expected that it's going to grow slower than six months ago is attributable more to the fact that public investment implementation is taking a bit longer than we expected."
He also cited the importance of raising the Philippine revenue and manage debts.
"Maintaining fiscal sustainability over the medium-term will also depend on the success of the priority tax reforms," World Bank report said.
The government has been pushing for a comprehensive tax reform program, the first package of which is now pending in the Senate.
The World Bank report said the delay in the anticipated push of the planned government infrastructre program has been contributing to the moderation of fixed capital formation growth, softening the growtt prospect for the year.
The Philippine economy grew 6.9 percent in 2016.
Shettycited the geopolitical issues which could affect the growth prospects in East Asia Pacific, including the Philippines.
The geopolitical issues include the tension in the Korean Peninsula and the South China Sea.
Shetty said these geopolitical issues have the "potential to increase uncertainty." Celerina Monte/DMS