World Bank sees Phl GDP growth at 6.4% in 2019 amid local, global uncertainties
Maris Federez • April 3, 2019 • 1818
MANILA, Philippines — The World Bank (WB) expects a 6.4 percent growth in the Philippine economy in 2019 despite the “lingering global and local uncertainties.”
The international financial institution also sees a 6.5 percent growth in the gross domestic product in 2020 and 2021.
According to the Philippines Economic Update (PEU) released on Monday by the WB, “these new estimates are lower than the previous World Bank forecasts of 6.5 percent growth in 2019 and 6.6 percent in 2020 released in January this year.”
This is prompted by “several factors including the delay in the 2019 budget approval and the slowing down of global trade that can lead to weaker demand for Philippine exports.”
“The country’s growth outlook remains positive,” said World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Mara K. Warwick.
She added that “higher private consumption due to lower inflation, steady growth of remittances, and election spending will fuel growth this year. Growth in public investment will be tempered in the first half of 2019 but is expected to recover in the second half of the year.”
The report also made mention of the decline in the annual private consumption growth from 5.9 percent in 2017 to 5.6 percent in 2018 due to high inflation.
On the other hand, the report said it is positive that the country growth will rebound to 5.9 percent in 2019 and 6.0 percent in 2020 due to declining inflation and the continued job generation in the economy.
The release also expects remittances to remain steady as new employment opportunities for Filipinos become available in countries like Japan, Germany, and Poland.
The report, however, also mentioned of several risks that can affect the country’s overall growth prospects, among them the delay in the approval of the 2019 budget and a looming drought.
It added that under a reenacted budget, the government cannot implement new programs and projects, which is seen to be affecting public investment.
It also noted that the El Niño phenomenon that is expected to cause several months of dry spell might reduce farm output and raise food prices.
The risks posed by external factors, including the potential escalation of trade tensions between the US and China and weak demand for the country’s exports are also a factor that can affect economic growth.
“In the short term, key priorities for sustaining the Philippines’ rapid and more inclusive growth include prudently managing fiscal and current account balances and preserving consumer and business confidence,” said World Bank Senior Economist Rong Qian.
Qian added that “as government ramps up spending to implement its inclusive growth agenda, it would need complementary reforms to increase revenue and ensure that the country’s finances are sound and sustainable.”
In the long term, the report said that “the country needs to focus on raising investments in human capital (people’s health, nutrition, education and skills) to speed up inclusive growth or growth that benefits the poor and most vulnerable.” – Maris Federez
MANILA, Philippines – The country’s economy has suffered a big blow since the beginning of the coronavirus disease (COVID-19) pandemic.
The extension of strict community quarantine further burdened the economy that government officials believe the Philippines is now in an economic recession.
According to the latest report of the Philippine Statistics Authority (PSA), the country’s recorded gross domestic product (GDP) plummeted from -0.7% in the first quarter to -16.5% in the second quarter specifically from April to June this year.
This is the lowest ever recorded since the year 1981.
The country’s economy had been very strong in the past two decades until this year’s COVID-19 health crisis that caused world trade and investments to suffer heavily. –MNP (with inputs from Rosalie Coz)
MANILA, Philippines – The Philippine government has signed a $370-million loan agreement with the World Bank for a project that aims to speed up the process of the country’s program to redistribute land to farmer-beneficiaries, the Department of Finance (DOF) said.
In a statement issued on Monday, the DOF said the loan will be used to expedite the splitting of about 1.4 million hectares of land covered by the Comprehensive Agrarian Reform Program (CARP) and provide individual titles to these parcelized lots to some 750,000 farmer-beneficiaries.
Finance Secretary Carlos Dominguez III and Mr. Achim Fock, who was then the World Bank’s Acting Country Director for Brunei, Malaysia, Philippines, and Thailand, signed the loan agreement last July 14, the department said.
Dominguez said the project called Support to Parcelization of Lands for Individual Titling (SPLIT) of the Department of Agrarian Reform (DAR) will improve the bankability of farmers and enable them to access credit and government assistance.
“It will support our economic recovery program by intensifying assistance to farmers and making agrarian reform beneficiaries (ARBs) more resilient to the economic and social impacts of the COVID-19 (coronavirus disease 2019) pandemic,” Dominguez said.
Under the project, the collective certificate of land ownership awards (CCLOAs) will be divided into individual titles for some 750,000 ARBs to help fulfill the completion of the decades-old CARP.
The government has redistributed about 4.8 million hectares of land to some 2.8 million ARBs under the agrarian reform program, but only 53 percent were in the form of individual land titles.
The remaining 47 percent or about 2.5 million hectares are CCLOA titles that were issued to groups of ARBs in the 1990s as a temporary measure to fast-track the distribution of land to farmer-beneficiaries, the DOF said.
“Through the project, ARBs will be provided security of tenure by way of issuance of individual titles. If ARBs or members of their family fall ill, clear and valid documentation of their property will allow them to mortgage their land, sell, or pass it on to their family members through inheritance,” it added.
The total cost of the SPLIT Project is US$473.56 million, of which US$370 million will be funded by the World Bank, while the government will provide the counterpart financing for the balance of US$103.56 Million.
The loan deal carries a 29-year maturity period, inclusive of a grace period of 10-and-a-half years, the DOF said.
Despite a decline in the Philippine’s gross domestic product (GDP) during the first quarter, the National Economic Development Authority (NEDA) is optimistic the country can recover from the effects of the coronavirus disease (COVID-19) pandemic.
NEDA reported a 0.2 percent decline in the country’s GDP in the first quarter of 2020, compared to the 5.7 percent growth during the same period last year.
NEDA Acting Secretary Karl Chua said the implementation of the General Community Quarantine (GCQ) of several areas in the country opens the opportunity to mitigate the impact of the COVID-19 crisis.
“Marami nang probinsya ang inilagay sa GCQ. Ibig sabihin, pwede na sa trabaho ang 75% of workers. So ito po ay inaasahan natin na makatulong sa pagbalik sigla ng ekonomiya, (There are now a lot of provinces under GCQ. It means 75% of workers can return to work. So we are expecting this can help in the economy’s recovery),” he said.
Chua reported there is a slow growth in all major sectors of the economy after a few businesses were only allowed to operate under the ECQ.
“Growth in the Services sector significantly moderated to 1.4 percent. Industry sector growth also declined by 3.0 percent, with the drop in manufacturing and construction and the sustained decline in mining and quarrying,” he said.
However, despite this, the country still enjoys a low and stable inflation and is still in a good position to recover strongly because of our country’s solid macroeconomic and fiscal management.
Chua said they are already coordinating with Congress to come up with an economy recovery program for industries and business affected by the health crisis.
“The program will include highly targeted tax incentives that are time-bound, transparent, and performance-based to help us attract the right types of investments and help firms recover,” he said. AAC (with reports from Dante Amento)
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