P-Noy’s legacy: Good governance, stable financial system – BPI economist

MANILA, Philippines - The rapid economic growth in the past six years was largely the result of the Aquino administration’s good governance strategy which gave businesses confidence in the Philippines, and a stable financial system that gave Filipinos access to affordable credit, according to the chief economist of the Bank of the Philippine Islands (BPI).

Speaking during the recently-held AmBisyon Natin 2040 Media Forum with the Economic Journalists Association of the Philippines, BPI chief economist Emilio Neri Jr. attributed this accomplishment to the administration’s Daang Matuwid governance platform.

President Aquino ran in 2010 on the platform of Daang Matuwid which sought to translate good governance to good economics. The Philippine economy grew an average 6.2 percent in the past six years and 6.9 percent in the first quarter of 2016. Growth in the second quarter of the year is expected to be at par with first quarter gains, driven by robust consumer and infrastructure spending.

“The Philippines has been on a very fast growth trajectory in the past six years. If you ask me, I would attribute that to several factors. Probably the biggest would be the Daang Matuwid. That’s probably the primary reason why we gained the confidence of the investing community. It is clear that corruption is being fought more aggressively than before,” said Neri.

He also attributed the country’s economic gains to the stability now enjoyed by the financial sector, a secure foothold not enjoyed in the previous decades.

“I would say that 30 to 40 percent of that strong growth could be attributed to a very stable financial sector.  For those who have not worked for more than six years, you would not have thought the difficulty of getting affordable credit from your friendly neighboring bank. Not only was credit difficult to get access to during the 80s, 90s  and the previous decade, the situation was very volatile such that if something like Brexit happened at a time when the financial system was a little more vulnerable than it is today, we would be easily affected. Interest rates would easily go up, the peso would easily depreciate significantly. But as you can see, we are to some extent insulated,” said Neri, who has been watching the financial markets for more than 20 years.