“Economy, prudence, and a simple life are the sure masters of need, and will often accomplish that which, their opposites, with a fortune at hand, will fail to do.”
--Clara Barton
By Alex P. Vidal
NEW YORK CITY -- Ilonggos are known for their resilience, thus we expect Western Visayas to move upward this year from the fourth fastest growing regional economy in the Philippines in 2017 despite the projection made by the World Bank (WB) January 8 that global economic growth will soften from a downwardly revised three percent in 2018 to 2.9 percent in 2019 amid rising downside risks to the outlook.
Western Visayas was next to Cordillera Administrative Region, and Northern Mindanao nad Central Luzon after posting an economic growth of 8.4 percent in 2017, according to the Philippine Statistics Authority (PSA).
This was attributed mainly to the recovery of the agriculture, hunting, forestry and fishing (AHFF) sector, and better performance of the service sector, it was reported.
The agriculture sector rebounded from negative 1.8 percent in 2016 to positive 8.8 percent growth in 2017 while the service sector grew from 6.7 percent in 2016 to 8.2 percent in 2017 based on reports.
It was further reported that industry sector slowed down to 8.8 percent in 2017 from its previous recorded growth of 10.6 percent in 2016 while the service sector continued to account for the largest share of the region’s economy at 57.3 percent, followed by industry with 24.1 percent, and AHFF sector with 18.6 percent share.
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As this developed, WB has reported the “darkening prospects” for growth among advanced countries in 2019.
In a statement, WB said international trade and manufacturing activity have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures.
Growth among advanced economies is forecast to drop to two percent this year, the January 2019 Global Economic Prospects says.
Slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh on the outlook for emerging market and developing economies.
Growth for this group is anticipated to hold steady at a weaker-than-expected 4.2 percent this year.
“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead”, said WB chief executive officer Kristalina Georgieva. “As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized. To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies.”
The upswing in commodity exporters has stagnated, while activity in commodity importers is decelerating.
Per capita growth will be insufficient to narrow the income gap with advanced economies in about 35 percent of emerging market and developing economies in 2019, with the share increasing to 60 percent in countries affected by fragility, conflict, and violence.
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A number of developments could act as a further brake on activity. A sharper tightening in borrowing costs could depress capital inflows and lead to slower growth in many emerging market and developing economies.
Past increases in public and private debt could heighten vulnerability to swings in financing conditions and market sentiment.
Intensifying trade tensions could result in weaker global growth and disrupt globally interconnected value chains.
“Robust economic growth is essential to reducing poverty and boosting shared prosperity,” said World Bank Group vice president for equitable growth, finance and institutions, Ceyla Pazarbasioglu. “As the outlook for the global economy has darkened, strengthening contingency planning, facilitating trade, and improving access to finance will be crucial to navigate current uncertainties and invigorate growth.”
The informal sector accounts for about 70 percent of employment and 30 percent of GDP in emerging market and developing economies.
Since it is associated with lower productivity and tax revenues and greater poverty and inequality, this is symptomatic of opportunities lost.
Reducing tax and regulatory burdens, improving access to finance, offering better education and public services, and strengthening public revenue frameworks could level the playing field between formal and informal sectors.
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