The Philippines' strong economic performance is seen to offset a slowdown in neighbors and prop growth in the region, the World Bank said, as it hiked its full-year forecast for the country.
The multilateral lender now expects the local economy to grow by 6 percent this year, higher than its previous estimate of 5 percent and hitting the optimistic end of the government's 5-6 percent target.
The Philippines is also expected to expand further in the next two years, with the World Bank seeing a 6.2-percent growth in 2013 and 6.4 percent in 2014.
"The Philippines economy has emerged as one of the fastest growing economies in East Asia, with growth accelerating to 7.1 percent in the third quarter," the World Bank said in its December update on East Asia and the Pacific.
It meanwhile credited the Aquino government's "commitment to reform," which it said helped boost domestic demand along with stronger government spending.
The Philippines will be among the drivers of growth in the region, where the World Bank is expecting an expansion of 5.6 percent this year, up from 4.4 percent in 2011.
"The rebound in economic activity in Thailand following the floods of 2011, strong growth in the Philippines, and relatively mild slowdowns in Indonesia and vietnam contributed to this increase," the World Bank said.
The Washington-based bank meanwhile highlighted a "window of opportunity" for the Philippines to accelerate reforms as it enjoys "political stability" and a "popular government."
"Several reforms have successfully started, notably in public financial
and debt management, anti-corruption, and tax policy," the World Bank said.
However, it urged "further structural reforms, especially in areas which will have more impact on the lives of the poor, along with investments in infrastructure, education, and health..."
"[T]he Philippines can take advantage of new opportunities arising from the global economic rebalancing and the strong growth prospects of the East Asia region," the World Bank said.
The external environment, however, continues to pose downside risks to the country's booming economy as well as the rest of the region, the World Bank said.
"High levels of global economic uncertainty" can be seen with likely delays in Eurozone reforms, a feared "fiscal cliff" in the United States and a slowing China.