A top insurance executive said Thursday he expects the Philippine economy to grow 8.2 percent this year despite the headwinds from both domestic and external fronts, including rising inflation rate, policy normalization in advanced economies and the geopolitical tensions in Eastern Europe.
Sun Life Investment Management and Trust Corp. president and chief investment officer Mike Enriquez said in an online briefing while rising inflation would impact economic growth in 2022, “the domestic economy is okay.”
“The economy may continue to grow despite higher oil prices and inflation,” said Enriquez who predicted a GDP growth of 8.2 percent, exceeding the government’s target of 7 percent to 8 percent expansion this year.
Enriquez said the forecast considered the rising inflation rate, which hit a 42-month high of 5.4 percent in May, up from 4.9 percent in April.
He said the GDP growth in the second quarter might slightly taper from the strong 8.3-percent growth in the first quarter because of the base effects and inflation.
The Financial Stability Coordination Council earlier said the domestic economy remained resilient in the past six months despite the global uncertainties that could have stifled growth and impact the stability of the financial system.
The FSCC is composed of the Bangko Sentral ng Pilipinas, the Department of Finance, the Insurance Commission, the Philippine Deposit Insurance Corp. and the Securities and Exchange Commission. It is the venue for financial market authorities to identify, monitor, manage and mitigate the build-up of systemic risks in the local financial system.
Data from the Philippine Statistics Authority showed that the GDP grew 8.3 percent in the first quarter, faster than 7.7 percent in the fourth quarter of 2021 and the last year’s full-year growth of 5.7 percent.
Domestic and external headwinds prompted the inter-agency Development Budget Coordination Committee to slightly lower the gross domestic product growth estimate this year to 7 percent to 8 percent from the previous assumption of 7 percent to 9 percent, taking into account the continuing external risks, particularly the war in Eastern Europe and monetary policy normalization in the United States.
The DBCC is composed of the heads of the National Economic and Development Authority, Department of Budget and Management and Department of Finance.
The economy contracted by 9.6 percent in 2020 at the start of the pandemic. The government’s massive vaccination rollout enabled the economy to gradually reopen that boosted business and consumer confidence beginning 2021.