World Bank hikes PH growth forecast

By Eireene Jairee Gomez

December 7, 2022 50

THE World Bank on Tuesday raised its 2022 Philippine growth forecast, citing a better-than-expected expansion over the first nine months of the year.

The Washington-based multilateral now expects the country to grow by 7.2 percent, up from 6.5 percent previously, after gross domestic product expanded by just over 7.7 percent as of the end of September.

"[S]trong domestic demand resulted in impressive growth in the Philippines, bringing renewed opportunities for income generation and improvements in the labor market outcomes," World Bank Country Director Ndiamé Diop said in a media briefing.

   

The expansion, however, was forecast to cool to 5.7 percent next year as high inflation and high interest rates are expected to temper household spending and investments.

"The bad news is that the high domestic inflation is threatening household consumption. The rising interest rates could temper investments and slow global growth could depress the export of demand sensitive products such as electronics going forward," Diop said.

"With all of that, economic growth in the Philippines is therefore expected to slow down next year."

Ralph van Doorn, World Bank senior economist, said the immediate challenge for the government was that of addressing inflation, which climbed to a 14-year high of 8.0 percent in November.

"Addressing inflationary pressure means deploying both monetary and non-monetary measures, for example, including free or importation lower tariffs to local areas to help augment domestic supplies as needed, support agricultural production for essential services, seeds, fertilizers and also to use... rate hikes to address second-round effects," he said.

Diop urged the government to boost initiatives aimed at sustaining investments, particularly in health and education, given the impact of the Covid-19 pandemic.

"Certainly, the pandemic has already met with a worsening of child malnutrition and stunting as well as learning losses in the country," he said.

"So, the focus should be on programs that will impact people and improve their future productivity, earnings and capabilities, and capacity for innovation."

Finding ways to improve productivity in health and agriculture is also essential to reducing poverty and food insecurity, and to achieve the government's target of a single-digit poverty rate by 2023-2028, Diop added.

"It not just reduces poverty and food insecurity directly among farmers. It also reduces poverty and food insecurity in urban areas," he said.

"And finally, it enhances the competitiveness of all industries... makes food more affordable and it increases the purchasing power and well-being of everyone."

World Bank raises PH growth outlook

by Chino S. Leyco, Manila Bulletin

The World Bank raised its economic growth outlook for the Philippines despite the damage from the Typhoon Karding onslaught, which the government said would not take the country off track of its full-year goal.

In the World Bank’s East Asia and Pacific October 2022 Economic Update, the Washington-based multilateral institution raised its gross domestic product (GDP) outlook for the Philippine to 6.5 percent.

The latest growth estimate was well above the 5.7 percent forecast previously released in April.

“A relaxation of border closures and the related recovery in tourism activity is expected to boost growth,” World Bank said in the report on Tuesday, Sept. 27.

“Output in Cambodia, the Philippines and Thailand is expected to surpass pre-pandemic levels of output in 2022,” the bank added.

World Bank’s new GDP projection, however, is at the lower-end of President Marcos’ full-year target of 6.5 percent to 7.5 percent, but aligned with the International Monetary Fund’s (IMF) downward revised forecast.

On Monday, the IMF cut the Philippine growth projection for this year to 6.5 percent from the previous of 6.7 percent in July.

But despite conservative protections of the World Bank and IMF, the National Economic and Development Authority is confident that the country could weather the impact of the recent typhoon that struck the country.

Socioeconomic Planning Secretary Arsenio M. Balisacan said the 6.5 percent to 7.5 percent economic growth target for 2022 is achievable.

“We are thankful Karding (Noru), which whipped on the belly of the Philippine economy (Luzon’s landmass), was not Ondoy, Ulysses, or Yolanda,” Balisacan twitted on Tuesday.

“Still, damage appeared considerable, though not likely at a level that would make us kiss goodbye to our growth target for this year,” he added.

The economy grew by 7.8 percent in the first half, faster than the target set by the Development Budget Coordination Committee, an inter-agency body that is tasked to set the country’s macroeconomic assumptions.

Based on initial estimates of the Department of Agriculture, damage and losses to the farm sector caused by Typhoon Karding were estimated at P141.38 million.

The initial assessment covers 16,229 hectares of land in the Cordillera Administrative Region, the Ilocos Region, Central Luzon, and Calabarzon, as of 12 noon on Monday, Sept. 26.

This translates to a volume of production loss of 5,866 metric tons of farm produce such as rice, corn, and high value crops, affecting 740 farmers.

Mindanao Gets Most Project Approval in Philippine Rural Development Project

Mindanao is getting the bigger chunk in terms of approval of projects in the Department of Agriculture (DA) Philippine Rural Development Project (PRDP) through funding from the World Bank, the Philippine Government and Local Government Units (LGUs).

In a press conference hosted by DA in Cagayan de Oro on 8 September 2015, the department reiterated that in fact more than 50% of the approved project for infrastructure is from Mindanao.

DA Undersecretary Emerson Palad said that the ultimate goal of PRDP is to increase income of farmers by 30% at the end of the project.

PRDP is a six year national government platform for an inclusive, value chain-oriented and climate resilient agriculture and fisheries sector. It is the upscale version of the Mindanao Rural Development Program (MRDP) where innovations are introduced to address current and emerging challenges like climate change and make rural development more effective.

Arnel De Mesa, Deputy Project Director of PRDP said that there is no specific budget allocation per island for this project. With a total of P27.5B fund resources to spend for six years, 67% or P18.5B goes to infrastructure support, 22% or P7B goes to investments in enterprise, 8% goes to planning and 2% goes to project management.

The projects that will be approved come from the proposals of each LGU.  However, prior to the approval, proposals must go through processes.

First, proposal must be demand driven and must be the need of the community. Second, it must be commodity and market driven wherein there is an assurance of income due to its demand in the market, thus will increase income and generate employment. Third, an LGU must have a Provincial Commodity Investment Plan (PCIP) where various stakeholders have been consulted.

According to DA regional director Lealyn Ramos, the LGUs of Mindanao have been receptive about the program. This is because they will only spend 10% of the total budget for a project approved; 80% would come from the World Bank and the other 10% from the national government.

Ramos said that there is no limit to the project an LGU wants to propose provided that they can produce their 10% share and they can provide documents.

In Mindanao, she said that there are already 75 provincial LGUs out of 81 who are engaged in PRDP. Total of 23 farm-to-market road (FMR) projects or P930M budget have already been approved for Northern Mindanao. Meanwhile, P4.9B worth of various projects have already been approved for Mindanao island and another P4.9B is waitlisted for review.

Ramos said that we are now into up scaling of products. If a farmer is into cacao, then products would include chocolates; there will be factory and packaging will be improved.

The Department reiterates that they are very strict in terms of the implementation of this project. They have now what you call online tracking tool, geotag, wherein photos of the before, during and after of the project will be put online by contractors. Through geotagging, they will know if a project is already done in the area. The department assures that there is no duplication of project in the same area. (JMOR/PIA10)