PHILIPPINE economic growth is expected to fall near the low end of the government’s target this year and also lead other Southeast Asian countries.
“The gross domestic product (GDP) of the top six economies in Southeast Asia (SEA-6) is projected to grow at an annual rate of 5.1 percent on average, with Vietnam and the Philippines driving the region’s growth,” according to a report authored by Angsana Council, Bain & Company, and DBS Bank.
The report projected 6.1-percent growth for the Philippines this year, within the government’s 6.0- to 7.0-percent target.
The Philippines trails Vietnam (6.6 percent), but is ahead of Indonesia (5.7 percent), Malaysia (4.5 percent), Thailand (2.8 percent), Singapore (2.5 percent).
Growth was below target in the first quarter at 5.7 percent. Economic managers, however, are confident that the rate could hit 6.0 percent in the second quarter.
Preliminary results for the April-June period will be released Thursday next week.
The report said the country’s growth would be propelled by infrastructure investments, renewable projects that had drawn interest from foreign investors and the growing population and workforce.
“Labor force growth will be most supportive for the Philippines and Indonesia, and positive in Malaysia,” it noted.
The report warned, however, that the country still needed to address some issues that could affect the outlook. For instance, the Philippines still lags in “education, infrastructure, and government effectiveness.”
The report also pointed out that “geopolitics, especially tensions with China, might escalate, disrupting recovery.”
It likewise cited that the country was still struggling to produce enough rice, despite “abundant agricultural land. It is the world’s top rice importer.”
The country is behind in “agricultural productivity and has a low level of investment for agricultural research and development,” the report added.
“Other SEA-6 countries need to set thoughtful strategies that recognize the sources of competitive advantage [such as] product and process technology, scale, access to low-cost materials, and committed offtake,” it continued, saying that the Philippines and Vietnam can improve their sustainable data centers with better policies and incentives to lure hyperscale players.
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