According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, “the Bangko Sentral ng Pilipinas (BSP) reported a 10.14% growth in local banks’ total resources from Php6.61 trillion in 2007 to Php7.28 trillion in 2008. Total bank resources are primarily made up of deposits and other assets. The positive growth rate is good news for the financial sector because it renews the lending confidence of banks. It also reverses the country's status from the common trend in developed countries where lost confidence has led consumers to withdraw savings.
Furthermore, per same published report, it was reported that “a research from Moody’s Investor Services subsidiary has reported that the Philippine government’s efforts to spur consumer spending to drive economic growth is good in the short run. However, human capital development and infrastructure investment might be better in spurring growth in the long run. The report also warns that countries with high debt-to-GDP ratios such as the Philippines might have inefficiencies in its stimulus packages. On the other hand, the report gives a string of hope that economies fueled by private consumption could be well off during the crisis.
Likewise, the government is optimistic that export recovery will come in the second half of the year as global demand for exports slowly pick up. The Semiconductors and Electronics Industries in the Philippines, Inc. (SEIPI) has reported that inventories in their warehouse have become stable. It reported that exports in their field are expected to recover in the third or fourth quarter. This would stunt or stop job losses in the country, according to IDEA.
On the other hand, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) has reported that the country’s GDP would grow by only 3%, lower than the government’s forecast of 3.7-4.4%. The UNESCAP forecast for the Philippines is lower than the average forecast of 3.6% for Asia. However, it is higher than the regional forecast of 1.5% for Southeast Asia. Fortunately, Asia is still seen as a more stronger region than developed countries, which is expected to contract by 2%.
However, the Bureau of Internal Revenue (BIR) reported that it had missed its tax goals for the first two months of 2009, collecting about Php98 billion. The said amount is Php2 billion of the Php100 billion target of the tax agency. The BIR cited the economic slowdown and the new tax relief law that exempted minimum wage earners from taxes and increased tax incentives for individual and married couples with or without dependents. The BIR is still optimistic to meet its first quarter goals of Php 165 billion by continuing its tax campaigns that would urge for increased tax collection.
Lastly, the BSP reported that the current account surplus of the country in 2008 was around US$4.2 billion, 41% less than the previous year’s US$7.12 billion. The current account is the net inflow of trade and income in the country. The Philippines had a decrease in surplus because of the global recession. It was noted that the recession is affecting foreign investments from the capital of financial accounts. In fact, financial accounts posted a net outflow in the last quarter. Fortunately, remittance growth was 13.7% in 2008, according to IDEA.
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