The revised forecast now points at growth at 3.7 percent this year and 4.2 percent in 2012.

In November, the World Bank estimated growth at 4.2 percent this year and 4.8 percent in 2012, according to its semi-annual East Asia and Pacific economic update.

"Our projection hinges on the successful implementation of the government's disbursement acceleration program and an acceleration in private consumption and investment, which have begun to grow faster in the last quarter," the World Bank said in its quarterly update.

"Significant downside risks largely stem from the weaker external environment and less than satisfactory public spending," it said.

In October, the World Bank forecast growth at 4.5 percent in 2011 and 5.0 percent for 2012. The previous outlook in March was for 5.0 percent in 2011 and and 5.4 percent in 2012.

The most recent report said inflation rate for the Philippines was expected to average around 4.8 percent this year, near the high-end of the central bank's 3 to 5 percent target range before easing to 3.5 percent in 2012 as commodity prices fall.

Manageable inflation risks would allow the central bank to maintain its policy rate at 4.5 percent until at least the first quarter of 2012, the World Bank said.

It added that inflation risks include domestic food supply shocks from weather-related disruptions and large-scale capital flows that can push up liquidity.

The World Bank said the Southeast Asian country was "relatively well-positioned" to weather shocks from the current global turmoil given its strong macroeconomic fundamentals and reforms and prudential measures it imposed.