2017年-世界发展银行全球_Philippines_Economic_Update_October_2017___Preserving_Consistency_and_Policy_Commitment_82页_3mb

Philippines Economic Update: Preserving Consistency and Policy Commitment (October 2017)

Core Content

The Philippines Economic Update (PEU) provides an overview of recent economic and policy developments, the external environment, and the outlook for the country's economy, with a special focus on Mindanao's potential. It is a biannual publication by the World Bank's Macroeconomics and Fiscal Management (MFM) Global Practice, in collaboration with other World Bank Global Practices. The report is intended to serve policymakers, investors, and analysts in the Philippines.

Main Points and Key Findings

1. Economic Performance and Growth

• Growth Trends: The Philippine economy continued to outperform its regional peers in the first half of 2017, but at a slower pace than in the previous year.
• GDP Growth: In the first half of 2017, GDP growth was 6.4% year-on-year, down from 7.0% and 6.8% in the first and second half of 2016, respectively.
• Growth Drivers:
  • Private consumption remained the main growth engine.
  • Export rebound contributed significantly to growth, reaching 20.0% year-on-year, the fastest half-year growth since 2010.
  • Services sector was the principal contributor to growth, accounting for 60% of the country's output and contributing 3.7 percentage points to overall growth.
  • Agriculture sector recovered with 5.6% year-on-year growth, driven by improved weather conditions and a low base year.

2. Fiscal and Monetary Policies

• Fiscal Policy: The government continued an expansionary fiscal policy, leading to a wider fiscal deficit (2.1% of GDP in H1 2017).
• Revenue Management: The government missed its revenue target, but the deficit is expected to be financed through a gradual expansion of the revenue base, a key part of the priority tax reform.
• Monetary Policy: The central bank maintained the key policy rate at 3.0% despite rising inflation.
• Inflation: Inflation remained elevated at around 3.1%, with food inflation being a major driver, especially rice prices. Inflationary pressures continued due to the depreciation of the peso and demand-side pressures.

3. External Sector and Exchange Rate

• Balance of Payments: The balance of payments turned into a deficit in the first half of 2017, driven by higher capital outflows.
• Exchange Rate: The real effective exchange rate weakened, influenced by the U.S. Federal Reserve's rate hikes.
• Trade Dynamics:
  • Exports grew strongly, but import growth remained high, particularly for intermediate and capital goods.
  • The trade balance remained in deficit over the past five years.

4. Employment and Poverty

• Employment:
  • Underemployment reached a 10-year low in April 2017.
  • Unemployment increased from 4.7% in 2016 to 5.6% in July 2017.
• Labor Market:
  • The labor force participation rate declined in early 2017.
  • Real daily wages increased, but income inequality persists.
• Poverty:
  • The poverty rate is expected to decline as the economy continues its structural transformation.
  • Remittances remained robust, contributing to household purchasing power.

Outlook and Risks

1. Growth Outlook

• The medium-term growth trajectory remains positive, but slower than expected.
• The World Bank projects GDP growth at 6.6% in 2017 and 6.7% in 2018 and 2019.
• Infrastructure investments are expected to boost capital formation and construction activity.
• Consumption will continue to be the main growth base, supported by remittances, credit expansion, and improved income levels.

2. Risks

• U.S. Fed rate hikes could lead to further peso depreciation and capital outflows.
• Global protectionism may reduce remittances and foreign trade.
• Slow implementation of the infrastructure program could hinder growth.
• Fiscal sustainability is a concern, especially with increased public spending.
• Policy uncertainty and downside risks such as trade tensions and economic slowdown could limit growth and poverty reduction.

Unlocking Mindanao's Potential

1. Regional Development Challenge

• Mindanao has historically underperformed compared to other regions in the Philippines.
• The region faces challenges in agriculture, logistics, power supply, and internet access.
• Agricultural production in Mindanao is significant, but farm-to-market logistics and infrastructure gaps are holding it back.

2. Policy Recommendations

• Conflict resolution is essential to support economic stability and investment.
• Regional development strategy should focus on improving connectivity, access to energy, and digital infrastructure.
• Agricultural reforms are needed to enhance productivity and market access.
• Public investment and policy certainty are crucial for sustained growth and confidence in the economy.

Conclusion

The report highlights the resilience of the Philippine economy, its consistent growth performance, and the importance of policy consistency in maintaining consumer and business confidence. It emphasizes the need for structural reforms to support long-term growth, reduce poverty, and leverage Mindanao's potential. Despite challenges such as inflation, slow implementation of policies, and external risks, the medium-term outlook remains positive, provided that fiscal and monetary discipline is maintained and policy certainty is preserved.