Slow infra pace prompts WB to cut growth forecast for PHL

The “slower than expected” pace of infrastructure projects in the country this year prompted the World Bank to reduce anew its growth forecast at 6.6 percent. 

The Washington-based multilateral lender said the delay in the anticipated push of government’s planned infrastructure program has contributed to the moderation of fixed capital formation growth, softening the growth prospects this year, said World Bank in its Asia Pacific Update of October 2017. 

This is the third forecast made by WB for the country: the first was 6.9 percent, then scaled down to 6.8 percent and then now to 6.6 percent citing government’s consumption and investment growth “somewhat weakened” following a similar path of the first quarter even as exports and private consumption were strong. 

Its 2017 forecast is still within the government’s 6.5-7.5 percent target range. 

Its projection for 2018 of Philippine GDP growth was reduced to 6.7 percent from 6.9 percent previously, below the Duterte administration’s 7-8 percent yearly growth target from 2018 to 2022. 

In 2019, the WB projects the economy to expand at only 6.7 percent, slower than the government target. 

The economy grew 6.9 percent last year, among the fastest in the region. 

Overall, the medium-term growth outlook remains positive, and is expected to be anchored in growth in the Philippines’ main trading partners which would lead to higher external demand, while imports would remain elevated due to necessary imports of intermediate and capital goods, including for the infrastructure program, the bank said. 

It expects the public infrastructure program to gain traction along with capital outlays and construction activities. 

The Duterte administration early this year unveiled its mammoth “Build, Build, Build” program where it would roll out 75 flagship, “game-changing” infrastructure projects, with about half targeted to be finished within the president’s term alongside plans to spend a total of up to P9 trillion on hard and modern infrastructure until 2022.

  The bank warned that the growth would be slower if the government fails to deliver on time its planned infrastructure program.

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