MANILA: The Philippine economy is poised to expand faster than expected this year, albeit still seen to post a slowdown versus 2022, thanks to resilient domestic demand despite high inflation and tight financial conditions, the World Bank says.

The World Bank sees the Philippines’ gross domestic product (GDP) growing 6% this year, upgrading its previous forecasts of 5.4% in December and 5.6% in April. It retained its growth forecasts at 5.9% for both 2024 and 2025.

“Despite the weak external conditions, strong domestic demand will drive the growth of the economy this year,” World Bank senior economist Ralph Van Doorn said in a virtual press conference.

Consumption will be supported by better employment, steady remittances and better consumer sentiment, he said.

The South-East Asian nation’s GDP rose by 6.4% year-on-year in the first quarter, with the Philippine government targeting 6% to 7% growth for the entire year.

However, downside risks include the possibility of higher-than-expected global inflation, tighter global financial conditions and an escalation of geopolitical tensions, Van Doorn said.

 - Reuters