MANILA, Philippines - The Philippine economy could grow “near seven percent†this year, within the higher end of the official government target, a senior official of the Bangko Sentral ng Pilipinas (BSP) said.
“We are expecting to achieve the objective of the government to have a growth rate of six to seven-percent. In fact, we could grow near the seven-percent figure,†BSP Deputy Governor Diwa Guinigundo said in Filipino during a televised interview late Monday.
Strong domestic consumption, increasing investments and accelerated government spending will remain to be the drivers of this year’s growth, he added. Economic expansion hit 6.5 percent as of the third quarter of last year.
Official 2012 growth will be released next month. The Aquino administration, which set a five to six-percent growth goal last year, is optimistic it surpassed its target.
“Private investments are continuously going up. They serve as big boost to our growth since they are the ones that build our infrastructure, establish power plants and spend for education and health projects,†Guinigundo said.
“Those are important factors in achieving sustainable economic growth,†he said in a news program aired on state-run National Broadcasting Network.
At this early, Guinigundo said investors are already taking notice of the Philippine economy’s resiliency, pointing to the record-breaking performance of the Philippine Stock Exchange index (PSEi) that breached the 6,000 level last Monday.
This milestone, which yesterday closed at record-high of 6,048.90, indicated large amounts of trading transactions that in turn suggest the “trust and confidence of investors in the country,†he explained. All of these, according to him, are based on “fundamental reasons.â€
“Investors saw that even during the global financial crisis for three years, the Philippine economy stood and continued growing. Secondly, since 2005, the country has posted over-all balance of payments (BOP) surplus until 2012. Those are proofs of resilience,†Guinigundo said.
BOP surplus amounted to $8.596 billion as of November, BSP data showed, beating last year’s forecast of $6.8 billion. A surplus indicates the country has enough resources to settle its trade obligations and foreign debts.
The BOP performance, the deputy governor said, was supported by sustained growth in exports, remittances, business process outsourcing and tourist receipts. These factors also contributed to the record-high reserves of $84.248 billion in 2012.
Investors’ optimism were also hinged on inflation being manageable at 3.2 percent in 2012 and a recent credit outlook upgrade from Standard & Poor’s Ratings that indicated investment grade is just a wisp away.
“In the long run, corporations will not be the only sectors that will benefit from our strong growth… Even those in the low-income group, they themselves will feel the effects of economic expansion,†Guinigundo explained.
“Those effects will be felt through more and better job opportunities for our people, which in turn could translate to more earnings and better lives,†he said.