Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Friday the medium- and long-term prospects for the Philippine economy remain promising despite the prolonged impact of the global health crisis.
Diokno, in a presentation during the virtual Philippine Economic Briefing for the Joint Foreign Chambers, cited the factors that could enable the country to weather domestic and external headwinds going forward.
He said these included the easing inflation rate, recovery of bank lending, ample liquidity, strong external position, stable banking system and improving consumer and business sentiments. “This opinion is shared by relevant third-party observers. Throughout the pandemic—amid a wave of rating downgrades worldwide—the Philippines maintained its investment grade credit ratings,” Diokno said.
“Beyond the short-term challenges of the pandemic, credit rating analysts say that sound fundamentals and policies will help the Philippines return to a sustainable growth path once the dust settles,” Diokno said.
Following the 12.0-percent gross domestic product expansion in the second quarter, the third-quarter growth rate of 7.1 percent was among the highest in the ASEAN region. This brought the average in the first three quarters to 4.9 percent, near the upper end of the 2021 target range of 4 percent to 5 percent.
Meanwhile, Finance Secretary Carlos Dominguez III pitched before foreign investors the Philippines’ “game-changing undertakings” to ensure a strong, inclusive and resilient recovery from the pandemic and urged them to take part in these initiatives to help achieve a ‘sustainable and better future” for the Filipino people.
These game changers include a fast-tracked digitalization program across the Philippine bureaucracy, the timely passage of the corporate tax reform law, the establishment of a national ID system, measures to improve the ease of doing business, the sustained modernization of the country’s infrastructure, and ambitious climate adaptation and mitigation projects, Dominguez said.
Dominguez said investment partnerships with foreign investors could be strengthened in the areas of infrastructure development, manufacturing, digital technology, renewable energy and research and development activities.
“This is a good time to expand collaborations. Our countries are emerging from the pandemic, led by the adept public policy and strong private sector initiatives,” Dominguez said.
Dominguez also reaffirmed the Philippines’ rosy post-pandemic economic outlook in his pre-recorded message to be aired later during the 10th anniversary celebration of the Italian Chamber of Commerce in the Philippines Inc.
“The Philippines is a vibrant market once again. We are determined to return to the pattern of rapid growth momentarily interrupted by the pandemic. We are more than ready for the new and better normal,” Dominguez said at the ICCPI event.
Meanwhile, a bank economist said the Philippine economy would tread a “choppy” path to recovery amid the continued risks from the pandemic.
ING Bank Manila senior economist Nicholas Mapa said it would take a while for the economy before it could return to where it was before the onset of the pandemic. “The economic recovery remains choppy… We can’t yet go back to the 6-percent [average annual growth rate] and the unemployment rate remains high,” he said.
“With COVID-19, we can’t see the straight line of growth,” Mapa said, citing the onset of new COVID-19 variants in other countries.
He said the fourth-quarter GDP numbers might be impressive amid the increased people’s mobility in the wake of easing restrictions in Metro Manila and other areas that could spur spending and more economic activity.