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Friday, March 29, 2024

Economy to extend strong growth – BSP

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Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said Tuesday the Philippines is on track to extend the 72 consecutive quarters of economic growth as macroeconomic fundamentals remain strong.

“Barring external shocks, we are on track to extend that streak [of 72 consecutive quarters of economic growth],” Tetangco said in a speech during the Management Association of the Philippines general membership meeting in Makati City.

Tetangco, however, said external challenges continued to threaten the economy, including the recent rate hike by the US Federal Reserve. “The prospects of higher interest rates in advanced economies may cause outflows in emerging market economies, including the Philippines. The Philippines has actually seen capital reversals as early as last year,” Tetangco said.

BSP Governor Amando Tetangco Jr.

Tetangco said he was expecting the manageable inflation environment, strong banking sector, robust external position and domestic demand to offset the external headwinds that might impact the economy.

“The Philippines has actually diversified its sources of economic growth… We must also take note that sustained growth has been achieved through the manageable inflation environment,” he said.

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The economy grew 6.8 percent in 2016, near the upper bound of the Duterte administration’s target range of 6 percent to 7 percent. This year, the government expects GDP to grow between 6.5 percent and 7.5 percent.

Members of the  Makati  Business  Club also expressed a  highly  optimistic outlook  for  the   economy, saying growth could either surpass or sustain the 6.8-percent expansion in 2016, despite expectations of increased inflation and interest rates.

Results of the MBC first semester executive outlook survey showed 83 percent of the  senior  business executives  were expecting  a  higher  or  same level  of  GDP growth  for  2017  compared  to last  year’s  6.8-percent  growth  rate, while 17 percent were projecting  a  lower  economic  growth  rate.

The respondents”•76  out  of  380  corporate  members”•were mostly  senior  executives  and  top management representatives belonging to MBC.

The survey also showed that 85 percent of the respondents were expecting inflation rate in  2017  to be higher  than  last  year’s  average  rate  of  1.8 percent, while 12 percent of those who responded were expecting  inflation  to stay  at the  same  rate.  Only 3 percent  were expecting  it to  be  lower  than  in 2016.   

More than half or about 57 percent  of  the respondents  were expecting a  higher  91-day treasury  bill  rate  than  last year’s  rate  of 1.5 percent, while  39 percent  foresaw constant interest  rates and 4 percent  said it would move  lower  in  2017. 

About 80 percent of the respondents were expecting  the  peso  to further weaken  against  the  US  dollar  by  an average of  5.16 percent  by  end-2017, compared to 2016  year-end  rate  of P49.82 a dollar.

Meanwhile, 11 percent were expecting the  peso-dollar rate  to  stay  the  same  as end-2016, while the  remaining  9 percent  were expecting the  local currency  to  appreciate  against the  dollar  by 3 percent. With Othel V. Campos

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