Gov’t urges investors to look at PH long-term prospects

Investors are urged to look at the Philippines’ long-term prospects, not the temporary hiccups, citing the country’s economy remains strong despite the recent spikes in consumer prices that economic managers described as “not a structural infirmity.”

Amid fears that the Philippines’ fundamentals may have already weakened, the top economic officials of the Duterte administration were quick to downplay this assessment, with Finance Secretary Carlos G. Dominguez III reiterating yesterday that “the Philippine economy is strong.”

Dominguez believes the skyrocketing commodity prices, which drove headline inflation to hit 6.4 percent in August, was just “a transient phenomenon,” which the government is now addressing.

“While the inflation rate kicked up in the first quarter of this year, we do not see this as a structural infirmity. It is a transient phenomenon that all of government is now mobilizing to deal with decisively,” Dominguez said.

The finance chief explained the government’s fiscal and monetary positions are very well managed, the country’s investment grade credit ratings are maintained, the national debt is relatively low, the banking system is healthy and the private sector is “rational.”

“Sometimes, we get distracted by the cloud and fail to appreciate the rainbow,” Dominguez noted.

He, meanwhile, said that the government is on track on its ambitious infrastructure plan.

“With strong investor interest, support from our development partners and the decisive leadership to get things done, we expect the infrastructure program to hit its stride in the coming months. The massive investments in infrastructure will help stimulate our growth even more,” he added.

For his part, Socioeconomic Planning Secretary Ernesto M. Pernia said the economy has been on a strong footing, growing by an average of 6.4 percent in the last eight years, the strongest since the mid-1970s.

In the first half of the year, the country’s gross domestic product (GDP) grew 6.3 percent, slower than the 6.6 percent in the same period last year, and below the government’s target range of 7.0 percent to 8.0 percent.

But even with the slower than expected growth, Pernia said the pace is a “respectable rate,” while economy is undergoing structural transformation, “in other words, the sources of economic growth have broadened and diversified.”

“Despite a positive outlook, we remain vigilant and are prepared to take the necessary policy measures to respond to potential downside risks to growth, both on the external and domestic fronts,” Pernia said.

“Looking at the bright side, the Philippines still has much-untapped potential in terms of economic growth,” he added.

Budget Secretary Benjamin E. Diokno, meanwhile, assured that public spending will continue to boost economic activity, citing “our expansionary fiscal policy is prudent, sustainable, and supportive of development objectives.”

“In fact, with a robust target of 7.0 percent to 8.0 percent in the next five years, the Philippine economy is the highest in the ASEAN 5 economies. The growth target is consistent with the projections of global think tanks and is within our reach, considering the rise of public investments in the country,” Diokno said.

In Diokno’s presentation, he shared the country’s fiscal performance, “the revenue effort is projected to increase from 15.7 percent in 2017 to as high as 17.6 percent in 2022.”