MANILA, Philippines — An economic manager of the Philippine government said on Friday that the country could surpass the latest growth forecast made by the World Bank, which expects the country’s economy to grow flat in 2018 and next year.
“The forecast of World Bank is about 6.7 percent gross domestic product growth rate this year, but we expect to do better than 6.7 percent,” Socioeconomic Planning Secretary Ernesto Pernia said during the second leg of the Philippine Economic Briefing 2018 in Clark, Pampanga.
Pernia then assured the public that the government remains “vigilant and well-positioned” against downside risks to growth.
In its outlook report released Thursday, the Washington-based lender said that in 2018 and 2019, the economy would likely grow 6.7 percent—unchanged from the full-year growth rate chalked up in 2017—before moderating to 6.6 percent in 2020.
READ: World Bank expects Philippine economy to 'maintain' growth in 2018, 2019
The World Bank’s projections fall below the government’s 7-8 percent target set for this year until the end of President Rodrigo Duterte's six-year term.
The Duterte administration plans to spend more than P8 trillion to upgrade the nation’s dilapidated infrastructure and aging ports—dubbed as the “Build, Build, Build” program—to spur GDP expansion until 2022.
“Any growth above 6.7 percent would require vigorous investment in physical and human capital to push the economy beyond its current potential output,” the World Bank said.
“Investment growth hinges on the government’s ability to effectively and timely implement the ‘Build, Build, Build’ public investment program,” it added.
Despite its sanguine forecast for the Philippines, the World Bank said there are “downside risks” to economic prospects, including a faster-than-expected rise in interest rates in advanced economies which could adversely affect capital flows and further weaken the peso.
The Bank also said the country’s “most pressing challenge” is still the delivery of inclusive growth, saying the pace of poverty reduction might drop slightly in the face of rising consumer prices.