Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said Tuesday solid macro-economic fundamentals will keep the Philippines resilient in 2016, despite domestic and global risks.
Tetangco said sound macro-fundamentals had always served as inherent stabilizers for the Philippine economy.
“For the Philippines, our positive growth prospects and solid macro-fundamentals will be the overriding pull factors to keep the economy steady on its course over the near and medium terms,” Tetangco said in a speech during the Tuesday Club event at Edsa Shangri-La Hotel.
Tetangco said the economy grew 6 percent in the third quarter, one of the fastest in Asia during the period, as government spending picked up 17.4 percent.
“Consumer spending also remained robust supported by a benign inflation environment and improving employment conditions in the country,” he said.
Tetangco said the country’s external current account remained in a surplus of $5.6 billion in the first nine months of 2015, or equivalent to 2.6 percent of gross domestic product.
Remittances from overseas Filipinos continued to be resilient, with $20.6 billion in the first 10 months, data showed.
International reserves remained at a comfortable level of $80.6 billion as of end-November 2015, enough to cover 10.3 months of imports.
Tetangco said despite these strengths, local monetary authorities should always be on their toes, mindful of the threats ahead.
He said among the challenges were the growth prospects in major emerging market economies such as China and advanced economies such as the United States, EU and Japan.
“Given that these economies are our major trading partners, we are cautious of how their economic growth paths will evolve in 2016,” Tetangco said.
He said another thing that could cause volatility in the financial markets would be the impact of the speed and magnitude of interest rate adjustments by the US Fed.
The trajectory of oil price path and its impact on oil-exporting economies that host a large number of overseas Filipino workers is also being considered, he said.
Tetangco said on the domestic front, one of the biggest threats to the economy would be the harsher and prolonged El Niño dry spell.
“As an independent constitutional institution, the BSP is in a rare position to help provide continuity of the stable economic environment that has been a source of strength for the economy,” he said.
“2016 is expected to be another challenging year. It is important therefore that we remain nimble and flexible in the face of shifts in our operating environment. We need to work towards achieving what, in aerodynamics, is called dynamic stability,” Tetangco said.