MANILA, Philippines – The World Bank has warned that the Philippines would slip into recession this year, saying government efforts to stimulate the economy would not be enough to revitalize foreign investments as the global turmoil continues to push businesses to the sidelines.
The foreign lender has projected that the Philippines would post a 0.5-percent contraction in its gross domestic product this year and thus join its neighboring countries that earlier reported a contraction of their economies.
The economy, as measured by gross domestic product (GDP), grew by a measly 0.4 percent in the first quarter of this year, compared to a 3.9 percent growth in the same quarter in 2008, the biggest contraction in the last two decades and below the 2.5 percent earlier expected by the government .
The drop in the GDP growth was weighed down by the impact of the US financial meltdown and the global crisis, historic declines in manufacturing and trade.
91-day bill’s rate at 4.421%.
MANILA, Philippines — Investors swamped Monday’s auction of Treasury bills as the government’s offers were oversubscribed by at least twice across all tenors amid expectations of continued cuts in the policy rates of the central bank.
Rates for the bellwether 91-day bills went up 2.7 basis points to 4.421 percent from 4.394 percent.
The World Bank (WB) expects the Philippines and other East Asia and Pacific economies to post slower 2008 growth rates, skid further in 2009, before exports pick up and credit and investments start flowing again in 2010.
In its Global Economic Prospect (GEP) 2009 report released Wednesday, the World Bank said the Philippines will grow by only 3 percent in 2009, slower than its 4 percent forecast for this year.
These projections are lower than the Philippine government’s own economic growth targets of between 4.1 to 4.8 percent this year, and 3.7 and 4.7 percent in 2009.
World Bank’s projections showed the Philippines lagging behind peer countries’ growth prospects in 2008 up to 2010.
This year’s 4 percent growth forecast for the Philippines is lower than South East Asian countries, like Thailand (4.6 percent), Malaysia (5.5 percent), Indonesia (6 percent).
Even previous laggards in the neighborhood, like Vietnam (6.5 percent), Lao (7 percent), and Cambodia (6.7 percent) will also slowdown in 2008, but their growth rates still outpace the Philippines’.