MANILA, Philippines - The continuous recovery in Japan’s economy gives additional boost to Philippine economic growth as the two are trading and investment partners, a Bangko Sentral ng Pilipinas official said.
“Our external trade and receipts get support from [Japan] ... and that will also provide additional stimulus to economic growth,†BSP Deputy Governor Diwa C. Guinigundo told reporters.
The Bank of Japan last week said economic growth may hit 2.7 percent in the fiscal year 2013 ending in March next year, a revised figure from its April’s projection of 2.8 percent.
However, the BOJ slightly upgraded its fiscal year 2014 gross domestic product (GDP) forecast to 1.5 percent from 1.3 percent.
Guinigundo noted that the Japanese economy has been steadily recovering due to reforms being introduced.
“I think the Japanese economic recovery is beginning to manifest itself. They will continue particularly with the third arrow, which is policy reform,†Guinigundo said.
“The fiscal and monetary reforms have been done before but not as pointed and as strong as [Bank of Japan Governor Haruhiko] Kuroda is doing it now,†he continued.
Guinigundo said Japan at present is “gungho†about putting in place the needed reforms to lift its economy.
This is a good thing, he said, since Japan is one of the Philippines’ major trading and investment partner. Thus, continued recovery in the Japanese economy will benefit the domestic economy as well.
“Our exports to Japan and imports from Japan remain substantial relative to the rest. Investments are also coming from Japan, both direct and portfolio,†he continued.
Moreover, Guinigundo stressed Japanese firms outside Japan have also been relocating to the Philippines, signalling stronger relations between the two countries.
The Philippine economy has already expanded by 7.6 percent in the first half, faster than the government’s full-year target of six to seven percent.
Despite the dismal trade numbers, the economy is growing thanks to domestic consumption and improved government spending.