Philippine economy to sustain momentum – Bank exec

CEBU, Philippines - The Philippine economy will continue to see a strong growth momentum on the back of sustained macroeconomic fundamentals, an official from Standard Chartered said, but also underscored the need for the government to execute its economic plans.

"There's strong growth rate consisting for many quarters in the Philippines. These growth rates suggest there's a strong momentum in the economy, which is not growing simply because of external factors but there's a lot of demand internally. That gives rating agencies a lot of confidence that the economy will continue to expand and along that economic expansion are job creation and new business formation. That's all part of the positive story," Karby Leggett, Asia head of public sector at Standard Chartered Bank Singapore, said in an interview at the sidelines of the meetings of ASEAN finance ministers and central bank governors in Mactan, Cebu.

Leggett stressed the Philippine government has to execute what it plans for the economy particularly infrastructure spending.

"The bigger question is around the execution and not formation of policies," he said.

"The more infrastructure you could put in place, the more growth you can unlock and the more you can maintain that virtuous cycle of growth," the bank executive emphasized.

He said one of the key strengths of the country's economy is its good external buffers such as the robust foreign exchange reserves.

As far as the fiscal side is concerned, Leggett noted the government has done a remarkable job in managing its deficit and that it has generally brought down overall government debt.

He added the government's policies must also be geared towards bringing the debt level down to enable it to widen the fiscal deficit by 3% to spur infrastructure spending.  

However, Leggett also cited the risks seen such as the uncertainties in the global economy.

The uncertainties include the policy risks emanating from the United States with the change of leadership there, which may affect the future of global trade relations.

The protectionist policies of US President Donald Trump and the strengthening of the dollar are seen as risks, he said.

But Leggett underscored the country may offset these risks as long as the government commits to execute its 10-point socioeconomic agenda particularly its massive infrastructure plan, which should spur the economy further. (FREEMAN)