The Philippine economy is expected to post another stellar performance this year based on the projections of the International Monetary Fund (IMF).
In its latest World Economic Outlook released on April 13, the Washington-based lender predicts that growth in the Association of Southeast Asian Nations-5 (ASEAN 5) – composed of Indonesia, Malaysia, the Philippines, Thailand and Vietnam- will “continue to diverge” in 2015.
Growth in the ASEAN-5 is seen to average 5.2% this year and will accelerate marginally to 5.3% in 2016.
Among the ASEAN-5, the IMF expects the Philippines to grow 6.7% in 2015 and 6.2% in 2016. With the continued drop in the prices of oil in the world market, consumption in the Philippines will remain strong, according to the IMF.
Growth in Thailand will pick up to 3.7% and 4.0% for both periods as well.
In the meantime, Vietnam will be the second fastest growing economy at 6.0% this year and 5.8% next year, while Indonesia will expand by 5.2% and 5.8%; Malaysia 4.8% and 4.9%, respectively.
Last year, the Philippine economy registered a 6.1% growth, slightly below the government’s official target. A slowdown in the farm sector and state spending weighed down the economy that was expected to grow by at least 6.5%.
In spite of the rosy economic outlook for the country, the IMF warned in a statement last April 1 that the projections can still be upset by external risks. “Disruptive asset price shifts in financial markets due to asynchronous monetary policies in advanced economies remain a risk, although the Philippines’ strong fundamentals provide a cushion,” said the international lender.
“External demand could be weaker if risks of deflation and lower potential growth in advanced economies and key emerging markets were to materialize,” it added.
Inflation in the Philippines is also expected to fall to 2.1% this year and 2.8% next year according to the same IMF report.