Philippine economy to grow up to 7% in 2019
As a result of strong government spending in the second semester, the Philippine economy is expected to grow strongly up to 7% this year.
One of the ways was through lowering the inflation rate. According to the Philippines' central bank governor Benjamin Diokno, lower inflation rate (after a 9-year inflation spike) caused an increase in household spending, which in turn boosted growth.
Philippines’ strong macroeconomic fundamentals and implementation of fiscal and tax reforms are expected to also push the country’s strong growth.
As such, the central bank is optimistic that the Philippine economy can reach 6-7% growth this year.
Philippine economy to grow faster than other Asian countries
Due to the strong Philippine economy, the World Bank (WB) forecasts the Philippines to grow faster than other Asia economic powerhouses like Malaysia and China. In fact, forecasts by WB projects Philippines GDP to grow second fastest at 6.4% in 2019, just slightly below Vietnam’s 6.6% growth.
On the other hand, China, Indonesia and Malaysia are expected to grow at 6.2%, 5.2% and 4.6%, respectively.
By 2020 and 2021, Philippines GDP is projected to expand and equal Vietnam’s at 6.5%. Similarly, the Indonesian GDP is expected to rise to 5.3% in the same two periods.
The Philippines to overcome the impact of US-China trade tensions
Trade tensions between the US and China are expected to have a minimal effect on the Philippines GDP due to the strong domestic economy of the Philippines. In fact, some exporters are shifting from exporting their products overseas to supplying domestic demand.
Philippine economy is also seeking to diversify its products, increase competitiveness and produce higher value-added products. It’s also planning to maximize its Generalized System of Preferences (GSP) privileges to the US and EU by boosting exports to these two countries.
The Philippine economy is currently seeking other new markets to export, such as Russia and the Middle East.