EDITORIAL - The good and bad news

First the good news: The Philippines continued topping the chart of economic performers in the world. Lately, the International Monetary Fund has retained its outlook for the country, crediting the robust growth to critical reforms and prudent policies.

The IMF maintained its 6.7 percent growth forecast for the Philippines, the highest in the Southeast Asian region, saying the rate will be sustained for two more years due to strong public consumption and investment.

“The Philippines has been one of the region’s strong economic performers over the past years, reaping the fruits of prudent policies and critical reforms,” said IMF Asia and Pacific division chief Luis Breuer in a briefing.

To sustain growth, the government is jacking up spending in the area of infrastructure development. In fact, the “Build, build, build” program will have the Duterte administration spending over P8 trillion until 2022.

However, the bad news is that the rising inflation rate is seen to seriously affect the economic gains the country has been reaping for the past years. Last month alone, inflation accelerated to its fastest in five years at 5.2 percent as commodity prices shot up to record high, further plunging Filipinos’ purchasing power.

There are also the higher US interest rates, volatile capital flows and the continued rapid credit growth that are stalking the country’s economic stability. Yes the rising trade war between that United States and China is also expected to greatly affect developing economies such as the Philippines.

The weakening value of the peso against the American dollar and the falling stock market are two other major concerns that are threatening to hamper growth. The government must do something to stop the bleeding.

For decades, the country managed to achieve strong growth on account of economic reforms that have attracted foreign investments. As the economy continues to accelerate, sustaining growth should be the government’s top priority.