The Philippine economy is expected to accelerate by 6.7 percent this year and the next, leading the ASEAN-5, or the fastest growing members of the Association of Southeast Asian Nations (ASEAN), according to the Organization for Economic Cooperation and Development (OECD).
“Government spending and public investment will likely anchor economic growth, with private consumption facing some friction and exports substantially weakening,” the OECD said in a report.
The Philippines, along with Vietnam, is expected to lead growth among the ASEAN-5, which also includes Indonesia, Malaysia and Thailand.
It is also projected to surpass the average growth rates of the ASEAN-10 at 5.3 percent for 2018 and next year, and of emerging Asia at 6.6 percent and 6.5 percent.
The OECD estimated the Philippines replicating its 2017 gross domestic product (GDP) growth of 6.7 percent, although this is slightly lower than the government’s target range of 7 percent to 8 percent for the year.
Dr. Kensuke Tanaka, head of Asia Desk at the OECD Development Centre, said the difference between growth forecasts of the government and the group is “very small.”
“More or less, we might have a similar view but I think it depends on the various factors, like domestic demand in general is strong, and on what extent exports are recovering or maybe infrastructure can be conducted,” he said on the sidelines of the Philippine Institute for Development Studies (PIDS) – OECD policy forum.
Tanaka is optimistic that Philippine economic growth can still exceed 6.7 percent in 2018 and next year, depending on how political and economic situation changes and on the level of risks.
“One of the issues we see is exports and also the infrastructure. These two are maybe the keys for further growth, especially for the Philippine economy because private consumption is anyway robust and this is basically sort of base of the growth,” he added.
The OECD report pointed out that emerging Asia, comprising Southeast Asia, China and India, is “doing well” in implementing its infrastructure projects.
