World Bank sees slow growth for 2023 Philippine economy at 5.6%

Washington-based multilateral lender World Bank is seeing a slow growth for the Philippine economy at 5.6% this year.

This was a decrease from the 6% that was forecasted in April by the World Bank.

"I think the first point I recommend is that you know, as you rightly point growth is projected to be 5.6% in the Philippines this year, and growth is expected to edge up a little bit in 5.8%. I think as I said in the presentation today, the big concern has been slowing global growth," Aaditya Mattoo, chief economist of the East Asia and Pacific Region of the World Bank, said in a press conference.

"[The] Philippines, like all the countries in the region, depends on the rest of the world for exports, goods, and especially services and also a lot of Filipinos work abroad and send the remittances back," Mattoo said.

Mattoo noted that all the factors are "tied to the state of the global economy," adding that financial conditions are expected to ease in the future.

"So our projection reflects, as I said, the fact that the global growth has slowed down, financial conditions have become tighter and are expected to ease in the future," Mattoo said.

"And the good news in the Philippines I should say is that we expect economic activity to be supported by domestic demand to be led by private consumption," he added.

Earlier, Finance Secretary Benjamin Diokno said the economic managers are eyeing to revise their growth targets after reviewing the first semester gross domestic product performance, inflation, and government spending.

In its East Asia and Pacific October 2023 Economic Update, the World Bank said that the growth in developing East Asia and Pacific region is projected to remain strong at 5% in 2023 but will ease in the second half of 2023 and is forecast to be 4.5% during 2024.

It said that the regional growth this year is higher than the average growth projected for all other emerging markets and developing economies but lower than previously projected.

The World Bank also said that services sectors could play an increasing role in driving development in a region known for manufacturing-led growth. It added that services exports have grown faster than goods exports.

"And the growth of foreign direct investment in services has exceeded that in manufacturing by a factor of five in China, Indonesia, Malaysia, the Philippines, and Thailand," the World Bank said, noting that the diffusion of digital technologies and services reforms are contributing to the improvement of economic performance.

It mentioned that in the Philippines, the adoption of software and data analytics increased the productivity of firms by 1.5% on average over the period 2010-2019.—AOL, GMA Integrated News