By Tobias Jared Tomas
THE WORLD BANK trimmed its growth forecast for the Philippines to 5.7% in 2022 due to the impact of the war in Ukraine, warning that growth could further slow to 4.9% if conditions worsen.
At a briefing on Tuesday, World Bank East Asia and Pacific Chief Economist Aaditya Mattoo said the Philippine growth projection for 2022 was downgraded from 5.8% forecast given in October, which he said was already conservative.
The Philippine economy expanded by 5.6% in 2021.
For 2023 and 2024, the World Bank expects the country’s gross domestic product (GDP) to grow by 5.6% on average.
However, these new projections are below the Philippine government’s 7-9% target for 2022, and 6-7% for 2023.
“Growth will draw strength from the domestic environment with declining COVID-19 (coronavirus disease 2019) cases, looser restrictions, and wider reopening. The strong domestic condition will help compensate for the weak external environment, reeling from a global growth deceleration, rising inflation, and geopolitical turmoil,” the World Bank said in a report released on Tuesday.
Consumption growth would be higher if not for the Russia-Ukraine conflict, which pushed up prices of fuel and food.
Mr. Mattoo said the Philippines is vulnerable to the impact of the Russia-Ukraine war since it is a net importer of fuel. Oil prices have surged since Russia’s invasion of Ukraine, which began on Feb. 24.
The World Bank said Philippine poverty incidence is estimated at 18.3% in 2021, and this is expected to decline to 16.2% this year as the economy recovers. However, the drop in poverty may be affected by the spike in inflation.
“In the Philippines, we have done a simulation that showed if food prices increased by say, 10%, it would lead to an increase in the poverty head count by 1% or another million. The fuel price increase will have an impact of…
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