Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Tuesday the government’s 2021 gross domestic product target range of 6.5 percent to 7.5 percent is “easily attainable” with the further easing of COVID-19 restrictions.
Diokno said during the Tuesday Club briefing latest available information showed the economy could bounce back by 6.5 percent to 7.5 percent this year from an expected contraction of between 8.5 and 9.5 percent in 2020.
“Based on available information, we expect the economy to bounce back by 6.5 to 7.5 percent… With the further easing of restrictions, improvements in the healthcare system and the full cooperation from each one of us to do what it takes to keep viral transmission under control, this growth target is easily attainable,” Diokno said.
“With the expanding economic activity, we are also expecting the unemployment rate to fall from a record-high 17.6 percent in April—the height of the lockdown—to 7 percent in 2021,” Diokno said.
He said deep into the pandemic and even during the strictest part of the lockdown, Filipinos exhibited fortitude and resilience as individuals and as a nation.
“As soon as this pandemic fades, I expect that the Philippines to become nothing less than an economic champion… ,” Diokno said.
He said the Philippines was in a position of strength when the pandemic hit. The Philippines’s strong macroeconomic fundamentals prior to the pandemic—manageable inflation, a strong and resilient banking system, a prudent fiscal position and a hefty level of gross international reserves—cushioned the economy from the impact of the crisis, he said.
Diokno said to calm the market and inject liquidity into the system, the BSP adopted a wide range of measures that deployed almost P2 trillion, equivalent to about 10 percent of the 2019 GDP.
The peso appreciated by approximately 5.67 percent—from P50.74 to the US dollar as of end 2019 to P48.021 at present.
Data also showed that as of end-November 2020, the gross international reserves hit an all-time high of $105 billion, or three times the import requirements of the country.
Diokno said the Philippines continued to receive affirmation and even upgrades from international rating agencies amid the onslaught of the pandemic. In February 2020, R&I upgraded the Philippines’ credit rating from “BBB” to “BBB+” with a “stable outlook.”
Fitch Ratings and S&P Global affirmed the Philippines’ credit rating of “BBB” and “BBB+” respectively in May while Japan Credit Rating Agency upgraded Philippine sovereign debt to A- (stable), citing strong economic fundamentals in June. In July, Moody’s affirmed the Philippines’ “Baa2” rating with a “stable” outlook.