Philippines to sustain robust growth — NEDA

MANILA, Philippines — Despite the successive downward adjustments in the country’s growth outlook by two international finance institutions, the National Economic and Development Authority (NEDA) remains bullish about the country’s economic prospects largely because of strong fundamentals.

The Asian Development Bank (ADB) and Fitch Solutions recently downgraded their respective growth projections for the Philippines this year due to a confluence of factors that include slower-than-expected growth in the second quarter, tighter monetary conditions, global trade tensions, persistent weakness in the agriculture sector, slower growth of exports and inflationary pressures.

ADB downgraded its growth outlook for the Philippines to 6.4 percent for 2018 and 6.7 percent for 2019 from previous expectations of 6.8 percent this year and 6.9 percent in 2019. Fitch Solutions, meanwhile, recast its growth outlook for the country this year to 6.3 percent from the previous forecast of 6.5 percent.

“We understand the concerns of ADB and Fitch, but we remain confident about the strength and stability of the country’s macroeconomic fundamentals,” said Socioeconomic Planning Secretary Ernesto Pernia in a statement over the weekend.

The economy grew by 6.3 percent in the first half, slower year-on-year as inflationary pressures were felt and agriculture growth remained weak.

“While this is slower compared to that of last year, we have strong enough macroeconomic fundamentals to weather external risks. Our fiscal policy remains prudent, our external position is supportive of economic growth, we have a stable banking system, and measures to address high inflation are currently being prioritized,” Pernia said.

The government, he said, would continue to push for necessary policy reforms for stabilizing prices, attracting more foreign investments and implementing its infrastructure program faster.

President Duterte also issued on Sept. 25 Administrative Order 13, which would remove non-tariff barriers and streamline administrative procedures on the importation of agricultural products to increase supply and drive down prices.

 “Besides short-term measures, we also need to look at long term solutions like giving farmers access to farming technology and developing high yielding varieties of rice and other vegetables. Thus, we are calling for the urgent passage of the Rice Tariffication bill,” Pernia said.

The Duterte administration also continues to ramp up investments in infrastructure to improve connectivity and lower the cost of doing business in the country, he said.

On lessening foreign investment restrictions into the country, the Economic Development Cluster has approved the draft of the 11th Regular Foreign Investment Negative List (RFINL), which will be the least restrictive among all FINLs. The document is now with the President for signing.