The World Bank (WB) has upgraded its growth forecast to 3.5 percent from 3.1 percent the Philippine economy this year, owing to a stronger outlook for the world economy, rising deployment of overseas workers that will boost remittances, recovery in private consumption and robust public spending.

In its latest issue of the Philippines Quarterly Update (PQU), the World Bank said the growth forecast for 2010 represents an upward adjustment from the previous PQU forecast of 3.1 percent. For the year 2011, the Philippines is forecast to achieve a GDP growth of 3.8 percent.

"Growth in private consumption is projected to hold up well in 2010," said Eric Le Borgne, World Bank Senior Economist who leads the team that prepared the PQU. "The rising precautionary savings that dampened spending in 2009 will likely diminish as consumer expectations gradually improve over the next twelve months."

Other important growth drivers for 2010 include a replenishment of depleted stocks by private companies, and the strong short-term outlook for the Business Process Outsourcing (BPO) sector.
After posting a strong 17 percent growth in deployment of overseas Filipino workers in 2008, deployment growth slowed down but remained robust at 11.7 percent through November 2009.

The PQU said this reflects global staffing restructuring induced by the global recession as well as the strong "value-proposition" of Filipino workers in the global labor market, a trend that will strengthen remittances this year.

As an example, the PQU cited the case of the sea-faring industry which has been, and continues to be, sharply affected by the global recession and the collapse in global trade and cruise ship tourism.