MANILA, Philippines (AP) — Prospects remain favorable for the Philippine economy in 2011, with investments, private consumption, services and exports expected to post gains, the World Bank said Wednesday.
The bank's quarterly Philippine report said the end of trade disruptions linked to Japan's post-disaster reconstruction is seen to benefit manufacturing and construction, while solid growth is forecast for the country's business process outsourcing industry.
World Bank Senior Economist Eric Le Borgne said rising mineral prices may fast track investments and increase production in the mining sector. The services and agriculture sectors also are likely to contribute to growth.
The report maintained the bank's forecast of 5 percent gross domestic product growth rate in 2011 and 5.4 percent in 2012.
But it said growth could potentially be higher because the government's early gains in tackling corruption and improving the investment climate could boost domestic investment.
Exports are seen to recover due to a technical rebound in exports affected by Japan's tsunami and nuclear plant disaster and a potential boost in exports as Philippine companies and workers take part in the reconstruction of affected areas, the report added.
Private consumption is seen to be buoyed by strong wage growth and employment among relatively well paid sectors like the BPO, it said.
World Bank Country Director Bert Hofman said the Philippines' recent performance indicates that its economy has stabilized since the global financial crisis, with more robust and less variable growth. Prior to the global recession that started in 2008, the country was perceived to have a weak fiscal position, making it vulnerable to shocks and volatility.
The report said the challenge now is to achieve broad-based growth that benefits the poor.
Presidential spokesman Edwin Lacierda said the report "recognizes the significance of the reforms undertaken by the administration, and how these measures provide stability as we pursue inclusive growth."