The World Bank on Thursday downgraded the 2011 and
2012 growth forecasts for the Philippines amid weakness in the global
economy, dpa reported.
The bank said in a quarterly report that it expected the
Philippine economy to grow by 4.5 per cent in 2011 and 5 per cent in
2012, down from its earlier forecast of 5 per cent and 5.4 per cent,
The report noted that the Philippine economy grew 3.4 per cent in
the second quarter, below the government target of 4.5 to 5.5 per
It said public construction spending contracted by 51.2 per cent
in the second quarter while exports continued to decline because of
weaknesses in the economies of the Philippines' main trading partners
the United States, Japan and Europe.
"The challenge for policymakers is to ensure that the Philippines
continues to improve its competitiveness while cushioning the economy
from adverse external shocks," the report said.
"To strengthen the country's resiliency to external shocks, the
government needs to accelerate public spending," it said. "Raising
more revenues through improved tax administration and reforms will
enable the government to meet its priority spending targets,
especially in infrastructure and human capital investment."
It projected domestic investment to expand to 21.8 per cent of
gross domestic product in 2011 from 20.5 per cent in 2010 and further
improve to 23.1 per cent in 2012 "as the government accelerates the
pace of capital outlays and as business sentiment turns more