BALI, Indonesia—The Philippines has called on the World Bank Group (WBG) and the International Monetary Fund (IMF) to spearhead discussions on the “dangerous convergence” of several adverse economic developments that could “open the door to a global recession” and undermine the prospects for growth and equitable development of emerging economies.

Finance Secretary Carlos Dominguez III said the Philippine government is “deeply concerned” over the “ultimate consequences” of this convergence that could curtail the Philippines’ prospects for inclusive growth and choke the flow of investments necessary to sustain its current economic expansion.

This convergence of disturbing developments are the deepening trade tensions between the world’s two biggest economies—the United States and China—along with the surge in crude oil prices, resulting partly from the trade blockades against certain oil exporters, and the rising interest rates brought about by the normalization of monetary policies in advanced economies, said Dominguez, who is governor of the World Bank for the Philippines.

“We call on the IMF and the WBG to highlight the perils posed by this convergence. If present trends continue, all the work we have put in preparing our economies for competitive trade, improving our domestic efficiency and maintaining the highest standards for fiscal discipline will fail to ensure inclusive growth,” read the Philippines’ country statement submitted by Dominguez to the World Bank during the Annual Meeting of its Board of Governors held here.

Dominguez said the escalating trade tensions between the US and China could lead to a slowdown in global economic performance, which will hurt emerging economies like the Philippines and poor countries the most.

These, he said, “could open the door to a global recession when it magnifies the effects of other adverse developments.”

“An open global trading regime is the only guarantee for sustained and inclusive growth. We are deeply concerned over the effects of the trade war on our own prospects for growth and equitable development,” Dominguez said.

On the other hand, rising interest rates resulting from the monetary policy normalization in advanced economies “have the effect of draining investments from the emerging economies and forcing the depreciation of most of the world’s currencies,” he said.

“The present trend could further curtail our growth prospects and choke the flow of investments emerging economies direly need to sustain their expansion,” Dominguez added.

He also expressed “great concern” over the sharp rise in world crude oil prices, which causes inflation rates to soar and curtails the capacity for expansion of emerging economies.

“Historically, cycles of rising oil prices have been reversed only by the onset of global recession,” Dominguez said. “At their present price levels, oil prices raise the prospects for global economic slowdown. Combined with the other factors mentioned above, a prolonged slowdown in global growth will be unavoidable.”

Notwithstanding these near-term risks to global growth, Dominguez said the Philippines has taken concrete steps to gird up its economy for the long-term challenges posed by the rapid—and disruptive—advances in digital technologies.

“As the Philippines shifts to investment-led growth, we expect to bring down the poverty rate dramatically over the next few years. We are confident that the wave of technological changes we now see, disruptive as it may sometimes be, will be beneficial to our economic emergence over the longer term,” Dominguez said.

He said the Philippine government is also implementing an ambitious infrastructure modernization program to sharpen the country ’s competitiveness in the medium term and create more jobs and achieve inclusive growth in the long haul.

“Years of fiscal consolidation provided us the space to initiate this modernization program. Improved revenue from the comprehensive tax reform program and administrative reforms will ensure the sustainability of this infrastructure build-up without diminishing fiscal discipline,” said Dominguez.

The Philippines, Dominguez said, has passed laws on data privacy, stronger enforcement of intellectual property rights and greater ease in doing business for enterprises across the board to prepare for the new information technology environment.

Moreover, the government has also adopted a 13-year primary and secondary school program that matches global standards, which is supplemented with an extensive skills training program, he said.

Dominguez said the Philippines has also passed into law a National Identification System to provide the government a reliable population database and facilitate access to government services, strengthened its social security system, and extended conditional cash transfers to protect vulnerable sectors while in the process of considering designs for a universal health care program.

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