The economy likely grew “slightly higher” than 6 percent from January to March this year, aided by poll spending, construction, investments, and manufacturing, central bank Governor Benjamin Diokno said Friday.
Inflation in April would be “right there at 3 percent,” taking into account the central bank’s own 2.7 percent to 3.5-percent forecast, Diokno said in an exclusive interview with ANC.
Asked about the possibility of first-quarter gross domestic product growth at around 6 percent, Diokno said, “probably slightly higher.”
The economy grew 6.3 percent in the previous quarter and 6.2 percent in the whole of 2018.
Diokno also told ANC that a reduction in the benchmark interest rate and the reserve ratio requirement for banks was “inevitable.”
A pause from the Federal Reserve “gives us some opportunity for easing,” Diokno said on the sidelines of an Asian Development Bank meeting.
Banks had also been “complaining” about tight liquidity conditions, he said.
The Monetary Board will meet on interest rates in the afternoon of May 9. It will be Diokno’s second policy meeting since assuming the governorship.
Diokno said he was “not worried about the supply of foreign exchange.” Gross international reserves were enough to cover 7.3 months worth of imports, he said.
“Our forex is hefty and there’s constant inflows from OFWs [overseas Filipino workers] plus the BPOs [business process outsourcing sector],” Diokno said.
The peso-dollar exchange rate is market-determined, he said, and that “We’ve not been participating for quite some time.”