Government optimistic about Philippine growth

MANILA, Philippines – The government is generally optimistic about the growth trajectory of the economy but is keen on taking advantage of opportunities for increased source of capital, trade and bringing peace to Mindanao, Socioeconomic Planning Secretary Ernesto Pernia said.

In a presentation during the Development Budget Coordination Committee (DBCC) briefing on the proposed 2017 national budget at the House of Representatives, Pernia said the country remains “vigilant and well-positioned” against domestic and external risks to growth.

The economy is expected to grow between six and seven percent this year, 6.5 to 7.5 percent in 2017 before stabilizing to seven to eight percent from 2018 to 2022.

The National Economic and Development Authority (NEDA) said growth would continue to be driven by strong domestic consumption supported by remittance inflows, improved employment prospects, low inflation and low interest rates; increased government spending on infrastructure, human development and social protection; and increased investment by the private sector on construction.

“As you may infer from the numbers, we are quite optimistic. We are keen on taking advantage of opportunities for economic growth while remaining vigilant of the risks,” Pernia said.

Pernia said the opportunities that can be taken advantage of to support growth include the country’s closer integration into the Association of Southeast Asian Nations (ASEAN) economic community as it hosts the ASEAN Summit next year.

“The ASEAN economic integration will open up new sources of capital, technology, and markets,” Pernia said adding that “integration with our ASEAN neighbors will be reinforced with our hosting of the ASEAN meetings next year. As our experiences with our APEC hosting last year has shown, we expect our ASEAN hosting to boost our tourism sector.”

The peaceful and smooth transfer of power to a new administration combined with its commitment to continue current macroeconomic policies is also seen to boost investor and consumer confidence, NEDA said.

The potential resumption of peace talks with communist and secessionist rebels is also seen to “open up new growth areas and sectors, thus introducing more dynamism in the entire economy,” it added.

Even at a strong growth trajectory, the economy remains vulnerable to domestic and external risks, Pernia said.