Philippines : 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Philippines

The Philippine economy has performed well in recent years with rising potential growth and strong macro fundamentals. Economic growth is supported by robust domestic demand and is broadly in line with potential while the outlook for inflation is well within the target band (3±1 percent). The external position is sound and fiscal policy is prudent, with a low and declining debt-to-GDP ratio. The strong economic performance, however, has not yet fully benefited a wide range of the population. Poverty and inequality remain high. Poor infrastructure has constrained private investment and job creation. Public investment has risen but continues to be low due to weak implementation capacity, while progress has been made on fiscal transparency. Investment in infrastructure and human capital, financed through increased government revenues while allowing a small increase in the deficit, is needed alongside structural reforms to reap the Philippines’ demographic dividend, promote inclusive growth and reduce poverty.