World Bank cuts growth outlook for the Philippines, but remains positive

The Philippine economy has historically been driven by private consumption, mostly funded by the remittances of over 10 million overseas Filipino workers. (AFP)
Updated 01 April 2019
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World Bank cuts growth outlook for the Philippines, but remains positive

  • The new estimates were lower than previous forecasts of 6.5 percent growth in 2019 and 6.6 percent in 2020 released in January this year
  • The Philippine economy has historically been driven by private consumption

DUBAI: The World Bank has downgraded on Monday its growth outlook for the Philippines this year and 2019, but remained positive despite internal and external factors that could affect economic expansion.

“Amidst lingering global and local uncertainties, the Philippine economy is poised to grow at 6.4 percent in 2019 and 6.5 percent in 2020 and 2021” the World Bank’s Philippines Economic Update said.

The new estimates were lower than previous forecasts of 6.5 percent growth in 2019 and 6.6 percent in 2020 released in January this year, according to the Bank, “owing to several factors including the delay in the 2019 budget approval and the slowing down of global trade that can lead to weaker demand for Philippine exports.”

“The country’s growth outlook remains positive,” said World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Mara K. Warwick. “Higher private consumption due to lower inflation, steady growth of remittances, and election spending will fuel growth this year. Growth in public investment will be tempered in the first half of 2019 but is expected to recover in the second half of the year.”

The Philippine economy has historically been driven by private consumption, mostly funded by the remittances of over 10 million overseas Filipino workers, with households contributing more than two-thirds of aggregate expenditures.

High inflation last year however temper consumption growth to 5.6 percent, from 5.9 percent a year earlier. It is expected to rebound in 2019 on lower inflation and continued job generation.

The World Bank report flagged several internal risks that could affect the Philippines’ overall growth prospects, including the delay in the approval of the 2019 budget and a looming drought.

A reenacted budget limits the government’s ability to implement new programs and projects, thus affecting public investment. The El Niño weather phenomenon meanwhile could cause several months of dry spell and reduce farm output, and thus result into higher food prices.

Among the external factors, the Bank raised concerns about the potential escalation of trade tensions between the US and China, a weak demand for the country’s exports and a strengthening in the US dollar.

“In the short term, key priorities for sustaining the Philippines’ rapid and more inclusive growth include prudently managing fiscal and current account balances and preserving consumer and business confidence,” said World Bank Senior Economist Rong Qian. “As government ramps up spending to implement its inclusive growth agenda, it would need complementary reforms to increase revenue and ensure that the country’s finances are sound and sustainable.”


Samsung Electronics retrieving all Galaxy Fold smartphone samples

Updated 51 sec ago
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Samsung Electronics retrieving all Galaxy Fold smartphone samples

  • The retrieval comes as the world’s biggest smartphone maker met with embarrassment ahead of the foldable device’s US release on April 26
  • Samsung postponed the handset’s launch while it investigated the matter

SEOUL: Samsung is retrieving all Galaxy Fold samples distributed to reviewers to investigate reports of broken screens, a day after it postponed the phone’s launch, a person with direct knowledge of the matter said on Tuesday.
The retrieval comes as the world’s biggest smartphone maker met with embarrassment ahead of the foldable device’s US release on April 26, with a handful of technology journalists reporting breaks, bulges and blinking screens after a day’s use.
The South Korean tech giant postponed the handset’s launch for an unspecified period of time while it investigated the matter. It said initial findings showed the issues could be associated with impact on exposed areas of the hinges.
A representative declined to comment further on Tuesday.
A person with direct knowledge of the supply chain said KH Vatec conducted an internal review of hinges used in the Galaxy Fold and found no defects. The supplier declined to comment.
In March, Samsung released a video showing robots folding Galaxy Fold handsets 200,000 times for its durability test.
Samsung’s head of IT and mobile communications, DJ Koh, has repeatedly said foldables are the future of smartphones.
Though the issue does not hurt Samsung’s balance sheet, the postponement damages the firm’s effort to showcase itself as an innovative first mover, not a fast follower, analysts said.
In some cases, reviewers had peeled off a layer of film which they mistook for a disposable screen protector.
“It’s disastrous that Samsung sent samples to reviewers without clear instructions on how to handle the device, and that the firm needs to fix screen flickering,” said analyst Kim Young-woo at SK Securities.
One Samsung employee, speaking on condition of anonymity, said, “On the bright side, we have an opportunity to nail down this issue and fix it before selling the phones to a massive audience, so they won’t have same complaints.”
Samsung emailed pre-order customers upon delaying the launch, online outlets said on Twitter.
“Your pre-order guarantees your place in the queue for this innovative technology,” Samsung said in the email. “We’ll update you with more specific shipping information in two weeks.”