Philippine GDP to grow 4.2 pct in 2012: World Bank

MANILA, Philippines (Xinhua) – The Philippine economy is seen to grow 4.2 percent this year on back of strong domestic demand, investment, and increased government spending amid a global slowdown, the World Bank said Wednesday.

The Washington-based lender also forecast in its latest East Asia and Pacific Economic Update that Philippine GDP will expand 5 percent in 2013.

Remittances sent by Filipino migrant workers will continue to fuel the consumption-based Philippine economy. Increased public spending and monetary easing policies will likewise support growth.

But the World Bank said the government needs to plug holes in its tax system in order to get more revenues and support public spending.

“To sustain such a stimulus, higher tax revenues (through the executive’s effort to strengthen tax administration and push for the immediate passage of the tobacco and alcohol excise and fiscal incentives bills) would be necessary,” the World Bank said.