Phl poised for faster growth – BSP

Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said the Philippines is poised for a faster economic growth this year on the back of the emerging economic recovery in the US and the resolution of the debt crisis in Europe.

Tetangco told reporters on the sidelines of the 2012 Convention of the Chamber of Thrift Banks yesterday that the two most recent external developments point to a stronger and faster gross domestic product (GDP) expansion for the Philippines this year.

“While the global economy continues to grapple with the adverse impact of the debt crisis in Europe and slower growth in developed countries, the Philippines continues to generate good macro-economic numbers,” he said.

The BSP chief pointed out that the country’s export sector would benefit from the signs of recovery in the US economy with the release of favorable economic data.

The weak global demand that pulled down the country’s export earnings by 6.9 percent as well as cautious spending by the Aquino government resulted in a slower GDP growth of 3.7 percent last year compared to 7.6 percent in 2010.

He also noted the recent favorable developments pertaining to the sovereign debt crisis in the Eurozone area after Greece reached an agreement with multilateral lenders led by the International Monetary Fund (IMF) for a second bailout package.

According to him, there is emerging stability in the situation in Europe unlike last month when there was a great deal of uncertainty on whether Greece would be able to come up with an agreement.

“Europe is still a concern but there are signs of stabilization. This would lead to less volatility in financial markets, equities with the Philippine Stock Exchange index has been showing record high level,” Tetangco added.

Likewise, the BSP chief explained that cautious government spending that pulled down last year’s economic growth has been addressed as the Department of Budget and Management (DBM) has already disbursed about 80 percent to 90 percent of this year’s budget.

“Our country is poised to achieve solid growth this year with both our monetary and fiscal engines running,” he said.

The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP growth expanding between five percent and six percent this year.

So far, Tetangco said inflation rate dipped to a 29-month low of 2.7 percent in February from four percent in January while the PSE index continued to hit new all-time high levels.