‘Philippines needs to prepare for global headwinds’

MANILA, Philippines — The Philippines should stand ready to face external factors that could impact the economy and make use of the country’s tailwinds to counter downside risks to the growth momentum, a banking executive said.

EastWest Banking Corp. CEO Jerry Ngo said consumption will continue to drive growth for the Philippines this year and in the medium-term, backed by a young population that would boost workforce demands.

“More people into the workforce means more people contributing and consuming, more demand. Now, what is the challenge? The challenge is to create that employment,” Ngo told reporters.

“The hope is we continue to grow the economy, and I really think that banks have a role to play in providing credit access and inclusivity,” he said.

However, Ngo said the Philippines continues to face headwinds as global economies experience slowdown and even the possibility of a recession.

“We need to make sure that we are basically prepared for those headwinds, because I do think there will be some headwinds in the US,” Ngo said.

“China is also already experiencing a slowdown, plus some fragility in the US with their employment sector which used to be very strong,” he said.

While a recession is not foreseen in the Philippines, it is expected in the world’s biggest economy as inflation remains a concern and its labor market is still challenging.

The US Federal Reserve also lifted rates again, which would impact the rest of the global economy.

China, the world’s second biggest economy and a major trading partner of the Philippines, is experiencing a frail recovery and has yet to come back as strong as expected, as indicated in its gloomy housing and property sectors.

“I think we will be affected. Obviously, geopolitics is something that I think we should be very concerned about and we need to tread very carefully,” Ngo said.

“Plus there are inflation concerns. There’s many concerns. But I think we have some really good tailwinds behind us that support this and I think from a policy perspective, we need to make sure that we emphasize that,” he said.

Ngo pointed out that the country should prioritize employment creation and make the workforce more resilient.

Meanwhile, EastWest launched its new tap-to-pay mobile application in partnership with Visa that would allow its credit card holders to pay for their purchases even without their physical cards.

Ngo said the app would also be available to debit card holders in the next few months, noting that biosecurity measures were properly put in place to ensure safety of the app.