■ BSP OF­FI­CIAL SAYS PH ECON­OMY RE­MAINS RO­BUST

Sun.Star Cebu - - TOP STORIES -

Diwa Guini­gundo, Bangko Sen­tral ng Pilip­inas Deputy Gov­er­nor for Mon­e­tary Sta­bil­ity Sec­tor, sees strong growth in Philip­pine econ­omy. The coun­try, he says, basks in its solid macro-eco­nomic fun­da­men­tals and is likely to con­tinue its sta­tus as the ris­ing tiger of Asia amid con­cerns of over­heat­ing, high in­fla­tion and do­mes­tic pol­icy is­sues. “The Philip­pine econ­omy is in a po­si­tion of strength to weather volatil­i­ties and un­cer­tain­ties in the global mar­ket. Do­mes­tic sources of re­silience al­low us to sus­tain the align­ment be­tween pos­i­tive eco­nomic growth and low in­fla­tion,” he said. The coun­try grew 6.7 per­cent last year af­ter Viet­nam (6.8 per­cent) and China (6.9 per­cent). While Jan­uary in­fla­tion hit high at four per­cent, the BSP of­fi­cial said it is still man­age­able and will even­tu­ally sta­bi­lize. BSP has re­vised its in­fla­tion fore­cast to hit 4.3 per­cent this year, as the first pack­age of the govern­ment’s tax re­form pro­gram af­fects con­sumer prices and oil prices. Her says in­fla­tion will go back to 3.5 per­cent by 2019.

BSP Deputy Gov­er­nor Diwa Guini­gundo shrugs off wor­ries about over­heat­ing, high in­fla­tion and weak­en­ing peso

Cit­ing solid macro-eco­nomic fun­da­men­tals, a top of­fi­cial from the Bangko Sen­tral ng Pilip­inas con­tin­ues to see strong growth prospects in the coun­try’s econ­omy.

Speak­ing be­fore the Fi­nan­cial Ex­ec­u­tives In­sti­tute of Cebu Inc. (Finex)-Cebu on Tues­day, BSP Deputy Gov­er­nor for Mon­e­tary Sta­bil­ity Sec­tor Diwa Guini­gundo as­sured that the coun­try will con­tinue to prove its po­si­tion as a ris­ing tiger in Asia amid con­cerns about over­heat­ing, high in­fla­tion, and do­mes­tic pol­icy is­sues.

“The Philip­pine econ­omy is in a po­si­tion of strength to weather volatil­i­ties and un­cer­tain­ties in the global mar­ket. Do­mes­tic sources of re­silience al­low us to sus­tain the align­ment be­tween pos­i­tive eco­nomic growth and low in­fla­tion,” said Guini­gundo.

The coun­try grew 6.7 per­cent last year, just slightly slower than Viet­nam (6.8 per­cent) and China (6.9 per­cent).

While Jan­uary in­fla­tion hit four per­cent, the BSP of­fi­cial said it re­mains man­age­able and will even­tu­ally sta­bi­lize.

BSP has re­vised its in­fla­tion fore­cast to hit 4.3 per­cent this year, as the first pack­age of the govern­ment’s tax re­form pro- gram af­fects con­sumer prices and pushes up the price of fuel.

The BSP, how­ever, pre­dicts in­fla­tion to go back to 3.5 per­cent by 2019.

Guini­gundo said the coun­try con­tin­ues to ex­hibit a strong growth mo­men­tum and that prices have re­mained sta­ble while govern­ment fi­nances re­main man­age­able.

More­over, the coun­try is awash with liq­uid­ity to fund the mo­men­tum of growth and has enough buf­fers in the ex­ter­nal sec­tor of the econ­omy.

“Amid ex­ter­nal chal­lenges, the cur­rent land­scape pro­vides plen­ti­ful op­por­tu­ni­ties for do­mes­tic and for­eign in­vestors alike. The Philip­pine econ­omy of­fers sus­tain­abil­ity and sta­bil­ity, hence, con­tin­ues to be a vi­able desti­na­tion for busi­ness and in­vest­ments,” said the BSP of­fi­cial.

Filipinos, he said, can bank on the coun­try’s healthy growth story with pos­i­tive eco­nomic growth in the last 76 con­sec­u­tive quar­ters or 19 con­sec­u­tive years, a tes­ta­ment to how re­silient the coun­try is amid global and do­mes­tic pres­sures.

“There re­ally is a ba­sis for op­ti­mism,” Guini­gundo stressed.

Mean­while, he dis­missed fears the econ­omy is over­heat­ing. He said credit growth re­mains con­sis­tent with the ex­pand­ing eco­nomic ac­tiv­ity and credit ex­pan­sion re­mains within the ac­cept­able lim­its.

“There is a wide­spread de­mand for credit by all pro­duc­tion sec­tors in the econ­omy. Such credit as a per­cent of gross do­mes­tic prod­uct ( GDP) re­mains low at 64.7 per­cent com­pared to China, Tai­wan, Korea, Sin­ga­pore, Malaysia, and Thai­land,” he said.

More­over, the BSP of­fi­cial stressed that the weak­en­ing of the Philip­pine peso against US dol­lar doesn’t re­flect a bad econ­omy.

The peso, ac­cord­ing to Guini­gundo, is on a flex­i­ble regime, which means that de­pend­ing on mar­ket fun­da­men­tals, it can ap­pre­ci­ate and de­pre­ci­ate. Ex­change rates de­pend on the sup­ply of the de­mand for US dol­lars.

“The weak­en­ing of the peso is not be­cause the econ­omy is bad but be­cause the econ­omy is good. Peo­ple are pro­duc­ing, in­vest­ing in for­eign cap­i­tal mar­kets, build­ing plants and fac­to­ries and hir­ing, which means they buy dol­lars from the mar­ket,” he said. /

SUNS­TAR FOTO / RUEL ROSELLO

CON­FI­DENT. BSP Deputy Gov­er­nor Diwa Guini­gundo spoke to mem­bers of the Fi­nan­cial Ex­ec­u­tives In­sti­tute of Cebu Inc. on Tues­day.

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