Higher infrastructure spending and remittances from overseas Filipino workers would make Philippine economy the third-best performer in Southeast Asia until next year, according to the United Nations Economic and Social Commission for Asia and the Pacific (Unescap).
In the 2017 Economic and Social Survey of Asia and the Pacific, Unescap said Philippine GDP could grow by 6.9 percent this year and 7 percent next year.
This will make the Philippines the third-best performer in the region where average growth is projected to settle at only 4.7 percent this year and 4.8 percent next year.
“Higher oil prices would help boost economic activities in the Middle East, which hosts many Filipino overseas workers. In addition to higher workers’ remittances, fiscal support would support household consumption,” Unescap said.
Apart from these, Unescap said the government’s budget in 2017, which is over 10-percent higher than in 2016, will boost growth and promote inclusivity in the economy.
This is mainly because the increase in the budget is focused on education and infrastructure spending. The national government’s infrastructure plans will also expand capital investment in the country for several years.
Unescap also said the country’s growth will be “mildly affected” by increasing inflation. Inflation is projected to settle at 3.2 percent this year and 3.4 percent next year, from only 1.8 percent in 2016.
The average inflation rate in Southeast Asia is seen at 3.2 percent this year and 3.5 percent in 2018.
“The inflation rates in 2017 and 2018 are projected to remain below the past trend,” Unescap said.
In Southeast Asia, Myanmar is projected to grow the fastest at 7.5 percent this year and 7.6 percent next year. Unescap said Cambodia would be the second fast-growing economy, which would grow by 7.2 percent this year and 7.1 percent in 2018.
Unescap said the GDP growth of Asia and the Pacific is expected to average 5 and 5.1 percent in 2017 and 2018, respectively. This is higher than the average GDP growth of 4.9 percent in 2016.
“As we enter the second year of the 2030 Agenda, economic growth in Asia-Pacific economies is steady but modest amid prolonged weak external demand and rising trade protectionism. Future economic growth will need to rely more on productivity gains, compared to factor accumulation,” UN Undersecretary-General and Escap
Executive Secretary Dr. Shamshad Akhtar said.
“In addition to ensuring sustained and robust economic growth, policymakers will
need to address social and environmental challenges in order to improve the quality of this growth,” she added.
To address challenges in the region, Unescap called for effective governance, in particular, a proactive fiscal policy through productive investments in infrastructure, social protection and resource efficiency.