CEBU, Philippines - Despite the challenging global economic environment, coupled with calamities that hit some parts of the Philippines, the government is optimistic that economic growth will accelerate in 2010.
The Investor Relations Office (IRO) of the Philippine government bared that because of the strong economic reforms and fundamental in place, the country can weather any volatility in the economic environment, and the upcoming election in May is not even expected to give short-term growth hiccup.
“In addition to the Government’s economic reforms that have been made in recent years, the implementation of the P330 billion ERP [Economic Resiliency Fund] helped cushion the impact of the global economic crisis on the Philippines and sustained economic growth,” the IRO said.
Claro P. Fernandez of the IRO said that coupled with the accommodative monetary policy stance of the Bangko Sentral Ng Pilipinas (BSP) to ensure adequate liquidity in the financial system and availability of credit, the P1.5 trillion 2010 budget is expected to further stimulate growth and will see the completion of all major projects implemented by the Arroyo administration.
In 2010, GDP is expected to grow between 2.6 percent to 3.6 percent and inflation is targeted to range between 3.5 percent, to 5.5 percent.
As the economy recovers from the global financial turmoil, and with an improvement in the public sector performance expected this year, the government aims to put its economic reforms back on track and to balance the budget by 2013.
IRO announced that the Philippines has posted 36 consecutive quarters of economic growth as of the end of 2009, making it one of the few economies in the region that avoided a recession despite the global financial crisis.
In 2009, the government postponed its plan to balance the budget in order to carry out the ERP which was designed to stimulate growth creating jobs and sustaining economic and business activity.
Additional revenues generated by economic reform measures in recent years enabled the government to invest in billions of pesos in critical infrastructure to stimulate economic growth and provide social safety nets in healthcare, education and social protection programs.
Moreover, IRO emphasized that the macro-economic environment remains stable and is supported by a favorable inflation environment, sound banking sector, strong external payments position, strong growth in foreign remittances and healthy domestic consumption.
In 2010, the P1.5 trillion budget is expected to further stimulate growth and ensure that the country’s heard-earned economic gains are sustained.
While the manufacturing sector is expected to remain subdued this year, services, personal and government consumption, mining and public construction are expected to continue expanding and to provide support as growth drivers for the economy.
IRO was established in July 2001, to strengthen the country’s relations with investors and other stakeholders by promoting active channels of information flow and dialogue between economic policy makers and investors.— Ehda M. Dagooc