Improving Efficiency of Social Protection
Efficiency in social protection programs is deemed crucial to shield the Philippines’ poor and vulnerable populations from economic shocks, amidst both global uncertainties and domestic risks such as high inflation, according to the latest Philippines Economic Update (PEU) released by the World Bank.
With persistent global and domestic risks looming, sustaining improvements in social protection remains paramount to help families cope with economic difficulties.
Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand, Said:
“It is essential to sustain improvements in social protection to help families, especially the poor and vulnerable, cope with economic difficulties as the country navigates the global slowdown, budget constraints, high prices of basic commodities, and climate-related risks,”
Strong Domestic Demand Fuels Economic Growth
Contrary to global trends, the Philippines is set to achieve a 6.0 percent growth in 2023 and 5.9 percent the following year, propelled by robust domestic demand. Consumer spending, fueled by ongoing job recovery and steady remittance inflows, forms the bedrock of strong domestic demand.
Additionally, fixed capital investments are expected to contribute to growth, buoyed by positive domestic activity and enhanced business confidence.
Ralph Van Doorn, World Bank Senior Economist said:
“In the face of escalating prices, a comprehensive strategy is needed to guarantee sufficient food for everyone. This entails a more productive agriculture and food system that is resilient to climate risks, serves all consumers, and competes effectively in both the local and global markets.”
Embracing Reforms and Addressing Risks
To sustain growth and attract private investment, the implementation of recent reforms allowing greater foreign participation in the economy is crucial.
However, Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand, underscores the presence of persistent global and domestic risks.
These risks, including rising global inflation, higher global interest rates, and geopolitical tensions, could impede recovery and poverty reduction in the country.