WB still sees above 5% output for PHL in ’15, ’16

By Joann Santiago

MANILA, Oct. 5 (PNA) — World Bank (WB) continues to see strong output for the Philippines for 2015-16 even if it slashed growth projections for the two-year period due to slower-than-projected performance in the first half of 2015.

In its latest Philippine Economic Update (PEU), the lender now sees a 5.8 percent growth, as measured by gross domestic product (GDP), for the country this year and 6.4 percent for 2016.

These were previously both at 6.5 percent.

“Lower 2015 growth takes into account the relatively weak first half growth brought about by slow government spending, negative net exports, and the initial impact of El Nino,” said WB Senior country economist Karl Kendrick Chua in a statement.

Growth in the first half of this year posted its lowest since 2011 at 5.3 percent primarily due to lower-than-programmed public spending and lower net exports in the first quarter of the year.

Domestic expansion posted a recovery in the second half after rising to 5.6 percent from quarter-ago’s five percent.

Chua said the domestic economy and Vietnam are the strongest in the region to date after continuously posting growth amidst setbacks from both the external and domestic front.

He said domestic growth remains driven by consumption, which in turn is seen to remain strong partly due to lower oil prices.

But he noted that impact of the El Nino would play a major role as among the risks for the second half of the year along with slower global growth, normalization of US interest rates and China slowdown.

Chua, on the other hand, pointed out that impact of the dry spell is seen to be countered by the expected recovery in government spending along with the low inflation environment.

For 2016, election spending is seen to help boost the domestic economy.

WB Lead Economist for the Philippines Rogier van den Brink, in an e-mail response to PNA, cited that growth in the first half of the year accelerates by an additional one percentage point in an election year for the Philippines.

“This is part of the reason why growth is projected to accelerate to 6.4 percent in 2016,” he added. (PNA)