ECO­NOMIC growth could pick up to 7.0-7.2 per­cent this year on the back on higher in­fra­struc­ture and con­sumer spend­ing as a re­sult of a new tax re­form law, a unit of Bank of the Philip­pine Is­lands (BPI) said on Fri­day.

“We are ex­tremely op­ti­mistic of the growth of the Philip­pine econ­omy,” BPI As­set Man­age­ment and Trust Corp. (BPI AMTC) Vice-Pres­i­dent and credit and re­search head Car­los A. Ja­lan­doni

“I am very ex­cited about the Philip­pines be­cause … a tax re­form was passed,” he added, not­ing that rev­enues from higher taxes would al­low the gov­ern­ment to im­ple­ment its “Build Build Build” pro­gram.

Lower per­sonal in­come taxes in­cluded in the law, mean­while, are ex­pected to spur house­hold spend­ing.

has enough am­mu­ni­tion to in­crease in­fra­struc­ture spend­ing. Even if the gov­ern­ment will not be able to get the [es­ti­mated] P130 bil­lion [in rev­enues], it will give enough funds for the gov- ern­ment to im­prove so­cial services, im­prove in­fra­struc­ture spend­ing and pro­vide more stim­u­lus to con­sump­tion,” Ja­lan­doni added.

In­fra­struc­ture project im­ple­menta fi­nan­cial sec­tor via in­creased loan growth.

“This year loan growth is ex­pected to ba­si­cally reach 20 and even 25 per­cent for some banks due to the gov­ern­ment’s ‘Build Build Build’. We have also lo­cal

elec­tions com­ing in 2019 so the banks will con­tinue to fund,” Ja­lan­doni said.

While higher taxes will lead were “not wor­ried” as the rise in con­sumer prices has re­mained man­age­able,

For 2018, BPI AMTC ex­pects to 3.8 per­cent, within the gov­ern­ment’s 2.0-4.0 per­cent tar­get.

year was quite low. In fact, the [2018 es­ti­mate] is still within the Bangko Sen­tral’s tar­get,” Ja­lan­doni said.

The peso’s ex­pected weak­en­ing, he also said, can be viewed in a pos­i­tive light.

“[W] should learn to ac­cept the - tion that the econ­omy is grow­ing,” Ja­lan­doni said.

“It (the econ­omy) is grow­ing on the back of more in­fra­struc­ture in­vest­ments and con­sumer spend­ing. Here, un­for­tu­nately, we don’t make a lot of elec­tric cars, ma­chiner­ies. We im­port more of these stuff and as we im­port more, the peso has to

The cur­rency was fore­cast to set­tle at P51.90 per dol­lar this year.

Strong eco­nomic growth cou­pled Ja­lan­doni claimed, has cre­ated an en­vi­ron­ment to in­vest and “take risk”.

“So you have all this growth but de­spite steady growth cre­ates the per­fect en­vi­ron­ment, the per­fect in­gre­di­ent for risk-tak­ing and that is what pushed the stock mar­ket last year,” he said.

The Philip­pine Stock Ex­change in­dex (PSEi) closed at a record high of at 8,558.42 dur­ing the last trad­ing day of 2017, a run that was ex­tended to 8,923.72 just this Tues­day.

Ja­lan­doni said BPI AMTC ex­pected the PSEi to reach 9,300 this year.

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