Philippine economy is expected to grow at a much faster rate this year than initially estimated despite higher inflation, the World Bank said. In its latest Global Economic Prospects report released on Wednesday, June 7, the Washington-based lender raised its 2023 gross domestic product (GDP) outlook for the Philippines to 6.0 percent. The latest growth projection is 0.6 percentage points higher compared to its 5.4 percent estimate last January. Moreover, it is above the 5.6 percent outlook stated in its April East Asia and the Pacific Economic Update. Although the World Bank's new GDP projection now falls within the government's targeted range of 6.0 percent to 7.0 percent, it still sits at the lower end of the goal band. World Bank's more positive outlook for the Philippines also coincides with its projection that inflation in the country would remain above the Bangko Sentral ng Pilipinas' target range of 2.0 percent to 4.0 percent. “While both core and headline inflation are expected to ease through 2023, in the near-term headline inflation is likely to remain above central bank targets in some countries (Mongolia, Philippines),” World Bank said. This is due to the delayed pass-through of increases in global commodity prices and domestic supply shocks, it added. Meanwhile, World Bank maintained the Philippines’ GDP forecast at 5.9 percent for 2024 and 2025. In the first quarter, the Philippines registered its slowest economic growth since the government eased quarantine restrictions as persistently high inflation and global headwinds took a toll on post-pandemic gains. The country’s GDP grew by 6.4 percent from January to March, a sharp slowdown from 8.0 percent a year earlier. It also weakened from 7.1 percent recorded in the final three months of 2022. Despite the slowdown, President Marcos’ economic managers were still confident that the country was still on track to meet its growth target this year. In April, the inter-agency Development Budget Coordination Committee (DBCC) kept its GDP target of 6.0 percent to 7.0 percent for this year and 6.5 percent to 8.0 percent for 2024 to 2028. DBCC said the GDP forecast already factored in risks posed by geopolitical and trade tensions, possible global economic slowdown, as well as weather disturbances in the country. The DBCC, however, adjusted upwards its inflation outlook for 2023 on the back of “persisting high prices of food, energy, and transport costs.” According to the inter-agency body tasked to set the government’s macroeconomic assumptions, inflation may average around 5.0 percent to 7.0 percent, higher than the previous assumption of 2.5 percent to 4.5 percent. But the DBCC expects inflation to return to the target range of 2.0 percent to 4.0 percent between 2024 and 2028.