MANILA, Philippines — The Philippine economy continues to grow robustly but is facing new challenges, the International Monetary Fund said.
“The Philippines economy continues to do well but is facing new challenges from rising inflation and a less benign external environment, in addition to persistent poverty and inequality,” the IMF said in a report.
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“The new environment requires adjustment of the policy mix to balance growth and stability objectives, while fostering inclusion,” it added.
“The medium-term economic outlook remains favorable, which places the country in a good position to tackle still elevated levels of poverty and inequality.”
READ: IMF mission: Philippine economy grows 'strongly' but short-term risks persist
Gross domestic product—or the value of all finished goods and services produced in the country—sharply eased to 6.0 percent in the second quarter, the slowest pace in three years.
In the first half of 2018, the economy grew 6.3 percent, well below the government’s 7-8 percent goal for this year until 2022.
In its report, the IMF forecasts the economy to expand 6.5 percent this year and 6.7 percent in 2019, buoyed by bullish domestic demand.
The IMF added that domestic inflation, which soared to an over nine-year high of 6.4 percent in August, is expected to remain above the Bangko Sentral ng Pilipinas’ 2-4 percent target band this year despite tighter monetary policy.
Early this week, Manila-based Asian Development Bank slashed its growth outlook on the Philippine economy amid elevated inflation, lackluster exports growth and “moderation” in agriculture. — Ian Nicolas Cigaral