World Bank: Philippines to remain one of fastest-growing economies in East Asia

The Philippine government is embarking on an ambitious $180 billion infrastructure program aimed at accelerating growth and creating 12 million new jobs through these projects. (Courtesy World Bank)
Updated 07 June 2018
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World Bank: Philippines to remain one of fastest-growing economies in East Asia

DUBAI: The Philippines would sustain its robust economic growth and remain one of the top-growing countries in East Asia and the Pacific until 2020, the World Bank said on Wednesday.
The Washington-based multilateral lender, in its latest report, projected the Philippine economy to grow 6.7 percent this year and in 2019, and 6.6 percent in 2020. The forecasts were however considerable lower than the government’s medium-term target of between 7 percent and 8 percent from 2018 until 2022.
“Growth in the Philippines and Vietnam remains robust, but capacity constraints (e.g., high capacity utilization rates) limit further acceleration, especially in the Philippines,” the World Bank’s June Global Economic Prospects report noted.
Among other East Asian and Pacific nations, Cambodia and Vietnam will outpace the Philippines’ gross domestic product (GDP) growth this year at 6.9 percent and 6.8 respectively, while China will lag a little at 6.5 percent GDP growth for 2018.
India’s economy, to which the Philippines is usually compared, is expected to grow by 7.3 percent this year and then accelerate to 7.5 percent in 2019 the year thereafter.
“Overall, the region benefits from solid fundamentals, including moderate domestic and external imbalances and significant policy buffers,” the World Bank noted in its report, although it cautioned some countries in the region continued to confront financial sector vulnerabilities.
The Philippines, including China and Vietnam, continues to experience fast credit growth while countries such as Malaysia, Laos and Thailand had to deal with elevated levels of debt. Cambodia and Vietnam also had to contend with their sizable fiscal deficits, the World Bank said in the report.
On a broader scale, the Bank said that regional growth would gradually moderate from a 6.8 percent clip in 2018 to 6.1 percent in the next two years.
“The slowdown in regional growth is largely due to the gradual structural slowdown in China the region’s largest economy. Activity in the rest of the region is expected to peak in 2018 and remain steady around its potential rate in 2019 and 2020,” the World Bank said. “The outlook is predicated on broadly stable commodity prices in the next two years, solid but moderating global demand, and a gradual tightening of global financing conditions.”


US-China trade deal hopes grow as oil prices decline

Updated 19 June 2019
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US-China trade deal hopes grow as oil prices decline

  • Data suggested a smaller-than-expected fall in American crude inventories
  • Preparations underway for Donald Trump to meet Xi Jinping next week at the G20 summit in Osaka

LONDON: Oil prices declined on Wednesday as data suggested a smaller-than-expected fall in American crude inventories, as hopes for a US-China trade deal continue to grow.
Brent crude futures were down 51 cents at $61.72 a barrel.
US West Texas Intermediate crude fell 25 cents to $53.65 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.
After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482 million, the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1-million-barrel drop analysts had expected.
Official estimates on US crude stockpiles from the US government’s Energy Information Administration are due during afternoon trading.
US President Donald Trump offered some support, saying preparations were underway for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan, amid hopes a trade deal could be thrashed out between the two powers. Trump has repeatedly threatened China with tariffs since winning office in 2016.
European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that he would ease policy again if inflation failed to accelerate.
Tensions remain high in the Middle East after last week’s tanker attacks. Fears of a confrontation between Iran and the US have mounted, with Washington blaming Tehran, which has denied any role.
Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.
On Wednesday, oil markets shrugged off a rocket attack on a site in southern Iraq used by foreign oil companies.
“It is interesting to note that the crude oil futures market could not rally on hawks planting bombs in the Strait of Hormuz but could rally on doves planting quantitative easing,” Petromatrix’s Olivier Jakob said in a note.
“This is an oil market that doesn’t know how to react when an oil tanker blows up but knows how to react when the head of a central bank makes some noise.”
Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.
OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.