The World Bank (WB) pegged Philippine economic growth at under 7 percent until 2009 due to the impending slowdown in its main markets, of which the leading one is the United States, local media reported on Wednesday.
The weaker U.S. dollar, the still debated probability of U.S. recession, and rising financial-market volatility would all cast a shadow over this soft-landing scenario not only for the Philippines but for the entire global economy, Philippine TV network ABS-CBN News said, citing a WB report.
This prospect is detailed in its latest report titled Global Economic Prospects (GEP), where the bank projected the country's gross domestic product (GDP) to grow only by 6.7 percent in 2007, 6.2 percent in 2008, and 6.5 percent in 2009, instead of the higher expectations of the government.
The government recently revised its projections for 2008 to 2010 from the projections made, when the 2004-2010 Medium-Term Philippine Development Plan was released, to within the range of 6.3 to 7 percent in 2008, 6.4 to 7.1 percent in 2009, and 6.7 to 7.5 percent in 2010.
"These risks would cut export revenues and capital inflows for developing countries, and reduce the value of their dollar investments abroad. In this context, the reserves and other buffers that developing countries have built up in past years may be needed to absorb unexpected shocks," the bank said.
The report warned that in the medium term, Association of Southeast Asian Nations member-countries, including the Philippines, must hasten their reform efforts.
The WB report said economic growth among East Asian economies other than China is expected to register only 6.2 percent by 2009,largely due to the projected slowdown in exports.
The United States, the Philippines' biggest export market, for one, is only projected to post a 1.3-percent increase in its imports. This, the WB report said, would have "second-round effects", or will also be reflected, on intraregional trade.
However, the report said the decline in export demand brought about by the global economic slowdown would not make a "serious dent" on regional GDP in the East Asia and the Pacific.
In the Philippines, the bank said its strong performance in the first half of 2007, and its medium-term performance, reflect fiscal reforms and public debt reductions. "The country is beginning to enjoy the benefits stemming from the substantial fiscal adjustment, public-debt reductions and alance-of-payments surpluses of recent years," said the bank.
The country's current-account surplus rose sharply due to large remittance inflows and the diminishing trade deficit, the bank added.
Source: Xinhua
|
Comment
Tell A Friend
Print Format
Save Article