The FINANCIAL — The World Bank expects the Philippine economy to grow at 6.5 percent in 2015 and 2016 despite a weak global economy. Sustaining this level of high growth and making it inclusive over the long term will enable the country to eradicate poverty and boost shared prosperity within a generation, according to the World Bank Group.
This is the main message of the World Bank’s latest Philippine Economic Update (PEU), released today with the theme “Making Growth Work for the Poor.”
“The Philippines has what it takes to sustain this high level of growth for many years,” said Motoo Konishi, World Bank Country Director. “The country is benefiting from low and stable inflation, its finances are healthy, and debt levels are declining. It has a dynamic private sector that is seizing global opportunities. Now is the time to move the economy decisively onto a path that reduces poverty and creates more and better jobs,” Konishi added.
The World Bank revised its forecast for 2014 to 6.0 percent from 6.4 percent, owing to slower government spending and lower farm production, but expects growth to bounce back in 2015 and 2016. The country can even grow beyond 6.5 percent if the government can fully utilize its budget as planned and accelerate reforms, the report says.
It also says that sustained growth in recent years has started to translate into gains in job creation and improvement in the lives of the poor, according to the World Bank Group.
More than a million jobs were created in October from the same month the previous year. Unemployment fell from 6.4 percent a year ago to 6 percent, the lowest figure in 10 years. Government data also shows that the real wage income of the poorest 20 percent of the population grew by almost 10 percent compared to only 2.4 percent for the upper 80 percent, while underemployment among the poor declined significantly in 2013, coinciding with the improvement in poverty incidence.
“If growth is sustained at 6 percent per year and the current rate at which growth reduces poverty is maintained, poverty could be eradicated within a single generation,” said World Bank Lead Economist Rogier van den Brink.
Discussion about this post