World Bank downgrades growth outlook for Philippines, East Asia

The Philippines will likely miss its 6 percent to 7 percent growth target for 2019, the World Bank said on Thursday. Above, the Philippines’ financial district of Makati. (AFP)
Updated 10 October 2019

World Bank downgrades growth outlook for Philippines, East Asia

  • But ‘Philippine economy remains strong’ as growth would rebound to 6 percent in 2020 and 2021

DUBAI: The World Bank on Thursday downgraded its growth forecasts for the Philippine economy and the wider East Asia Pacific region as a weakening global economy, rising protectionism and the lingering US-China trade spat tempered expectations.

The Philippines will likely miss its 6 percent to 7 percent growth target for 2019, the Washington-based lender said as GDP would expand at a slower 5.8 percent this year versus the 6.4 percent it earlier forecast.

The slowdown in Manila’s economic growth, according to the global lender, are largely due to the delay in the passage of this year’s national budget as well as the government spending ban on new projects prior to the May midterm elections.

World Bank senior economist Rong Qian, in a statement, however said the ‘Philippine economy remains strong’ as growth would rebound to 6 percent in 2020 and 2021 particularly if next year’s national expenditure plan gets swift legislative approval.

“[The] timely passage of the 2020 budget and decisive action on the country’s tax reform program will remove uncertainties and help the private sector make timely decisions, boosting job creation,” Mara K. Warwick, the World Bank country director for Brunei, Malaysia, Thailand and the Philippines, also said in the statement.

Meanwhile, economic growth in the East Asia Pacific would slow to 5.8 percent in 2019 from 6.3 percent last year due as the heightened uncertainty involving the US-China trade tiff – which resulted to a pull-back in exports and investment growth – test the resilience of the region.

Regional growth as also downgraded to 5.7 in 2020 and 5.6 percent in 2021, respectively, from Bank’s previous assessment.

The World Bank noted that “downside risks to the region’s growth prospects have intensified. Prolonged trade tensions between China and the United States would continue to hurt investment growth, given high levels of uncertainty.”

“A faster-than-expected slowdown in China, the Euro Area and the United States, as well as a disorderly Brexit, could further weaken the external demand for the region’s exports.”


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.