MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) expects the Philippine economy to withstand potential shocks for 2018 and beyond, laying down foundations for continued economic growth.
Speaking in front of the Rotary Clubs of Manila, Makati West, and Forbes Park, BSP Governor Nestor Espenilla Jr said on Thursday, January 4, that monetary and fiscal authorities are ready to face external and domestic shocks.
“We carefully survey the landscape for potential threats. We ensure that our tools to deal with them remain sharp. We strive to stay on top of developments, and to always be prepared, so that we can address risks appropriately and in a timely manner,” the central bank governor said.
Some of the potential shocks the BSP chief is looking at are brought about by the populist policies of the United States government and the Brexit.
Espenilla said domestic sources of strength kept the Philippine economy growing strongly last year. (READ: Philippine economy to grow fastest in ASEAN-5 in 2018 – First Metro)
“While the coming year is likely to bring continued challenges for the Philippines, we are well-placed to deal with these challenges. The country’s firm growth momentum and manageable inflation environment provide ample space to respond appropriately to evolving domestic and global conditions,” he added.
The Philippines’ gross domestic product (GDP) growth expanded to 6.9% in the 3rd quarter of 2017, from the revised 6.7% in the 2nd quarter last year. This brought the average economic growth to 6.7% in the 1st 3 quarters of 2017.
Meanwhile, inflation averaged 3.2% in the 1st 11 months of 2017, after it eased to 3.3% in November from a 3-year high of 3.5% in October. The central bank has set an inflation target of 2% to 4% between 2017 and 2020.
In terms of the implementation of Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law, Finance Undersecretary Gil Beltran said an economic growth of at least 7% is “doable” this year.
Beltran said the 1st package of the tax reform program should be complemented by the planned rice tariffication and aggressive infrastructure buildup.
“Low inflation is an indication that the country’s macroeconomic fundamentals remain strong. Solid fundamentals backed by TRAIN 1 implementation, rice sector reform and the ‘Build, Build, Build’ policy will push the country’s growth to 7 to 8% this year and sustain manageable inflation,” he added. – Rappler.com