The Philippines will remain on a “sweet spot” of high growth and manageable inflation in 2017, as more opportunities open up and outweigh the impact of external headwinds, economic officials told local and foreign fund managers.
Government officials, in a conference call held on Dec. 6 by the Investor Relations Office of Bangko Sentral ng Pilipinas, said the 2017 targets of robust growth and modest inflation were achievable.
“Bottom line is that the Philippines is on a solid footing despite fragility of the global operating environment,” Francisco Dakila Jr., managing director for monetary policy at Bangko Sentral, said.
The government set an economic growth target of 6.5 percent to 7.5 percent and an inflation target of 2 percent to 4 percent in 2017.
Among the major Asian countries, the Philippines emerged as one of the fastest growing economies with average GDP growth of 7 percent in the first nine months of 2016, surpassing China’s 6.7 percent, but behind India’s 7.4 percent.
Economic managers said the performance of the Philippines was expected to continue even as the global economy would enter 2017 with uncertainties arising from key challenges, including the change in political leadership and anticipated rise of interest rates in the US, the continuing process of “Brexit” and slowdown of China and other major economies.
The country’s buffers, particularly fiscal and monetary space, will help provide resilience to the domestic economy, officials said.
Dakila said inflation, which remained below the targeted ceiling since 2009, was expected to slightly inch up from the estimate of below 2 percent this year to around the midpoint of the official target band next year.
National Economic and Development Authority deputy director-general Rosemarie Edillon said there would be additional growth drivers starting 2017.
She cited the progress of economic integration of the Asean region”•a market of 600 million people, which could spur Philippine exports. The process of Asean economic integration formally kicked off in December 2015.
Edillon said the Duterte administration’s infrastructure agenda would go full swing in 2017, the first year that the government would operate under full-year budget. Under the 2017 budget, the government would spend P860.7 billion in public infrastructure, equivalent to 5.4 percent of GDP.
