Philippines economy will continue to see strong growth under new administration: central bank chief
AFTER an impressive first quarter in which the Philippines saw better-than-expected growth of 8.3 per cent, the country’s central bank believes the economy is poised to perform even better in the coming months.
This even as President Rodrigo Duterte, who has been in office for the last 6 years and guided the country through the Covid-19 pandemic, prepares to hand over the reins to his successor Ferdinand Marcos Jr - who won by a landslide in the recent presidential election - at the end of June.
“The next administration will have a more robust economy, and receive a long list of implementation-ready infrastructure projects. A total of 58 such projects are due for completion in 2023 and beyond,” said Bangko Sentral ng Pilipinas (BSP) governor Benjamin Diokno at a webinar hosted by the Asian Development Bank Institute.
“We are optimistic that the Philippines will post an even better performance following a solid rebound last year,” he added, predicting that the economy will see annual growth of 6 per cent to 7 per cent in the coming years.cc
Diokno said the central bank will work with the incoming government to boost financial stability and promote longer-term development goals. This includes pushing ahead with ongoing efforts to mitigate the impact of the Covid-19 pandemic and the Russia-Ukraine war, while doing more to boost climate-friendly growth and financial inclusion.
“Employment is reaching pre-pandemic levels, and the Purchasing Managers’ Index hit 54.3 per cent in April, the highest in 4 years,” said the BSP chief. “Both business sentiment and consumer outlook has improved. Our business expectations survey show broad improvement in the coming months.”
His comments came a day after the central bank decided last Thursday (May 19) to raise key policy rates for the first time since 2018. The Monetary Board increased the key policy rates by 25 basis points — the overnight reverse repurchase facility to 2.25 per cent, the overnight deposit facility to 1.75 per cent, and the overnight lending facility to 2.75 per cent — with the moves taking effect on May 20.
Separately, the central bank is hoping to see greater digitalisation and consumer protection in the country’s banking and wider financial sectors. Diokno noted that there is a target to have 70 per cent of Filipinos have proper bank accounts, and for half of all banking transactions to be digitalised by 2030.
“The BSP is on track to meet its goals in payment digitalization thanks to the pandemic. As of the third quarter of 2021, we estimate that about 41 million (or 53 per cent) of adult Filipinos already have a transaction account with financial institutions,” said Diokno.
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