Econ managers see sustained growth

CLARK FREEPORT ZONE  , Philippines  — Monetary and fiscal authorities are optimistic about the sustained growth and development of the Philippines in the next six years.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. told participants of the second leg of the Philippine Economic Briefing the country is seen booking strong gross domestic product (GDP) growth over the next few years despite the challenges and risks in the horizon.

Espenilla cited the country’s broadening growth drivers, higher potential growth of the economy, bullish investor and consumer sentiment, favorable inflation environment as well as ample liquidity and strong credit dynamics.

“The domestic economy has experienced sustained uninterrupted expansion for the past 76 consecutive quarters. This growth has been increasingly broad-based, thereby creating more opportunities across all segments of society,” he said.

The country’s GDP expanded at a slower pace of 6.5 percent in the fourth quarter from seven percent in the third quarter, bringing the full year growth at 6.7 percent in 2017.

Economic managers penned a GDP growth of between seven and eight percent over the medium term.

On the other hand, inflation picked up to 3.2 percent last year from 1.8 percent due to higher global oil and food prices, but remained well within the BSP’s two to four percent target.

In the first three months,  inflation averaged 3.8 percent despite kicking up to 4.5 percent in March from 3.8 percent in February primarily due to the temporary impact of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

“We see these inflation drivers as transitory. However, we are closely monitoring the situation. Amid the pick-up in inflation, we stand ready to act, if needed, to firmly anchor inflation expectations so that inflation targets will continue to be met in 2018-2019,” Espenilla said.

The BSP chief said the Monetary Board would carefully evaluate the appropriateness of a measured policy response to firmly anchor inflation expectations in line with the forecast that inflation targets would be met in 2018 and 2019.

The next rate-setting meeting of the Monetary Board is scheduled on May 10.