Philippines economic outlook promising — Espenilla

MANILA, Philippines — Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the country’s economic outlook remains promising amid the meaningful reforms implemented by authorities over the past two decades.

“The Philippines is recognized as one of the fastest growing and most resilient economies in the region and the world, enjoying a sweet spot of high growth and manageable inflation complemented by a strong and resilient financial system,” Espenilla told participants in an investor forum.

The economy grew 6.5 percent in the second quarter from 6.4 percent in the first quarter, bringing the average expansion to 6.4 percent in the first semester.

“This strong economic performance did not happen overnight. Rather, it is the result of meaningful reforms pursued since the 1997 Asian financial crisis. The list of reforms is long and wide ranging,” Espenilla said.

Economic managers pegged the GDP growth target at 6.5 to 7.5 percent this year and seven to eight percent in 2018 up to 2022.

“We believe these targets are attainable, given strong macroeconomic fundamentals, rising government spending on critical infrastructure and human capital development, increasing private sector investments, and strong domestic consumption on the back of rising incomes of the country’s young and educated workforce,” Espenilla said.

He said the highlights of the reforms adopted by fiscal authorities is the adoption of the inflation targeting framework in 2002 wherein the BSP achieved its inflation target since 2009, except only in 2016 due to unusually low oil prices.

Inflation averaged 3.1 percent in the first nine months after rising up to 3.4 percent in September due to higher food prices.

“We expect the combination of high growth and low inflation to be sustained on the back of the economy’s rising productive capacity and prudent conduct of monetary and fiscal policy,” Espenilla said.