MANILA, Oct. 5 (Xinhua) -- The World Bank (WB) predicted on Thursday that the Philippine economy is projected to continue its strong growth path in the future, by growing 6.6 percent in 2017 and 6.7 percent in 2018 and 2019.
In its Philippines Economic Update report, the WB said that improved global demand for Philippine exports, robust domestic consumption, and expected higher government investments in infrastructure will fuel the Philippine economy.
In the long term, the report says unlocking the potential of Mindanao in the southern Philippines "is key to reducing poverty and achieving more inclusive growth in the country."
The steady consumption growth, improved remittances, and higher incomes, as well as an expansion of credit, are the main drivers of growth, the report says.
Exports are projected to grow at a robust rate as stronger growth is expected in the Philippines' main trading partners, it says.
"An increase in public spending on infrastructure building is expected to boost investment growth," said WB lead economist for the Philippines, Birgit Hansl.
She added, "Higher investment growth could push the country's growth rate towards the upper end of the government's target of 6.5 to 7.5 percent of the gross domestic product (GDP), but this is contingent on the public infrastructure program gaining full traction."
The report also discusses some risks that could threaten growth. It says the ongoing U.S. Federal Reserve rate hikes could cause further depreciation of the peso and continuing capital outflows.
"Rising protectionism in some developed countries could also affect remittances and foreign trade. Bottlenecks in the planning and project approval process can also hamper implementation of infrastructure projects," it says.
In the long term, the report says that attaining peace and development in Mindanao is essential for sustaining progress nationwide.
"The central policy challenge for Mindanao and the rest of the country is how to accelerate inclusive growth, to create more and better jobs and reduce poverty," said Mara Warwick, WB country director for Brunei, Malaysia, Philippines, and Thailand.
Warwick added, "This task is more challenging in Mindanao, because of the long-standing armed conflict. While the government and other sectors of society are addressing the key drivers of conflict, programs that create jobs can strengthen the process of peace-building."
A huge proportion of the country's poor is in Mindanao, a province that has about 25 percent of the country's population and 37 percent of the country's poor.
The report notes that Mindanao is also a major source of the country's food and farm products. Increasing productivity in this area, the report highlights, could reduce prices for food and other goods across the country and improve the competitiveness of the agriculture sector.