Deputy Bangko Sentral ng Pilipinas Governor Diwa C. Guinigundo is firm on the country’s solid economic performance in 2018, saying such experts as those from Fitch Ratings, for example, forecast growth on the “low-side.”
To be able to maximize the demographic dividends, cash transfers, free tuition fee should be sustained
“That forecast is on the low-side. I would rather stick to the government’s target of seven to eight percent,” Guinigundo on Wednesday told reporters.
Analysts at Fitch projected continued growth for the Philippines last year averaging a 6.1 percent, even lower than the actual 6.2 percent local output print in 2018.
According to the BSP executive, with lower inflation, consumption expenditure is expected to improve, way better than its performance a year-ago.
“The same is true with investments, (it) can be discouraged by high inflation and with lower inflation, we expect investments to be better in terms of its contribution to total economic growth,” Gunigundo said.
“At the same time, the negative (investment) list of the government has been streamlined and that will provide a boost to foreign and domestic investments,” he added.
Moreover, the Central Bank official said government spending, which supported the country’s growth in the previous years, was seen sustained as the Duterte administration is committed to undertaking a higher spending program for infrastructure.
“To be able to maximize the demographic dividends, cash transfers, free tuition fee should be sustained. That means more public spending and more public spending can translate to higher growth,” he said.
Despite the less optimistic global growth outlook, Gunigundo expects the country’s net exports to continue to expand, saying the sector had been on the “recovery mood” since 2016.
He also expressed confidence the Philippines will withstand the global headwinds it faces this year.
“We are more dependent on domestic demand [and] our domestic demand remains strong and resilient. We should be able to withstand the headwinds in 2019,” he concluded.