12:00 am | Tuesday, October 7th, 2014
The Philippines is expected once again to grow faster than any other major economy in Southeast Asia this year, the World Bank said, even as it stressed the need for the government to sustain reforms that could cement gains for the future.
In a report released at the weekend, the World Bank said it expected the Philippines to grow by 6.4 percent. The Washington-based lender stuck to its previous projection released last August. Last year, the Philippine economy surged 7.2 percent, beating all major Southeast Asian markets.
The rest of developing East Asia is expected to grow by 6.9 percent, but excluding China, economies in the region are expected to grow an average 5.3 percent.
“Private consumption, supported by strong remittances, will account for more than half of overall growth,” the bank said.
This latest projection is still below the government’s target range of 6.5 to 7.5 percent for 2014. Next year, the state goal moves up to 7 to 8 percent, before rising another half percentage point to 7.5 to 8.5 percent.
Last August, the World Bank said that if current growth rates were sustained over the next decade, income levels could double and millions could be lifted out of poverty.
“Higher government spending on infrastructure and social services, an acceleration of reconstruction, and progress with ongoing and newly awarded public-private partnership (PPP) projects will provide an additional boost to demand,” the report read.
The Aquino administration’s 80 PPP projects are worth the equivalent of 15 percent of gross domestic product (GDP).
In its report, the World Bank stressed the importance of the success of PPPs, noting that local infrastructure has been undermined by decades of under-investment.
Problems included inadequate roads, ports and airports, and unsatisfactory water, sanitation and waste facilities. Recent congestion in the port of Manila forced shippers to divert cargo delivery 130 kilometers away and widespread blackouts are looming as energy supplies shrink.
The World Bank lamented that the implementation of previous PPP initiatives had been slow—of the 10 projects put to tender in 2011, only one has been finalized.
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