MANILA, Philippines - Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said yesterday the economic growth story of the Philippines is not a fluke as a series of reforms helped the country survive the uncertainties in advanced economies led by the US and the debt crisis in the Europe.
Tetangco told participants of the two-day Philippine Investment Forum titled “The New Beginning” sponsored by Euromoney Institutional Investor PLC that the Philippine economy is on an upward growth trajectory underpinned by stable macroeconomic conditions.
“This is not a false start, the Philippines has indeed come on its own. The growth story is not a fluke, it is the result of a series of reforms, reforms that were critically thought of and well executed,” Tetangco said.
Amid negative external developments led by the economic uncertainties in the US and the debt crisis in Europe, the Philippines managed to post a gross domestic product (GDP) growth of 3.7 percent last year or slower than the 7.6 percent expansion recorded in 2010.
The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP expanding between five percent and six percent this year.
The BSP chief stated in his keynote address that emerging market economies including the Philippines would continue to fuel global economic growth amid the projected slowdown in advanced economies led by the US and Europe.
“Global growth remains relatively unsteady and fragile. In fact, the global economic growth outlook for 2012 is expected to be tilting towards a further slowdown but emerging and developing countries will continue to outpace advanced economies in terms of economic growth,” he added.
The International Monetary Fund (IMF) stated in its January 2012 World Economic Outlook (WEO) that the US would book a GDP growth of 1.8 percent or the same as last year while the Eurozone would experience a contraction of 0.5 percent after expanding by 1.6 percent last year.
Furthermore, the multilateral lender sees the GDP growth of the Association of Southeast Asian Nations (ASEAN-5) including the Philippines to expand by 5.2 percent this year from 4.8 percent last year while that of China would slowdown to 8.2 percent from 9.2 percent.
Tetangco said the Philippines would benefit from the country’s strong external payments position with its gross international reserves (GIR) hitting record levels and balance of payments (BOP) posting a surplus as well as demographic dividends.
“While some countries are facing problems relating to their aging population, the Philippines is set to enter its demographic sweet spot. Studies have shown that extended periods of accelerated economic growth have coincided with the countries entering this period,” he explained.
According to the United Nations (UN), the Philippines is the last major Asian economy to benefit from this demographic dividend by 2015 as the median age of the country is only 22.2 years well below other young countries in Asia.
“On the basis of this potential to capitalize on these demographic dividends, the Philippines is well placed to ramp up its growth trajectory,” he said.
The BSP chief explained that the higher economic growth trajectory would be achieved amid a benign inflation environment and appropriate monetary policy supportive of growth.
“We will continue to provide a sound monetary policy framework one that is finely calibrated, appropriately flexible, and well communicated to stakeholders so that inflation target is well guarded,” he said.