Bangko Sentral ng Pilipinas Governor Benjamin Diokno said over the weekend the Philippine economy is poised for a sustained recovery this year from the impact of the COVID-19 pandemic.
Diokno stressed the country’s manageable inflation, stable banking system and robust external position at the sidelines of the International Monetary Fund-World Bank Spring Meetings in Washington D.C.
Diokno, in separate discussions with institutional investors in conferences organized by Barclays, Bank of America Securities and J.P. Morgan, said while inflation would likely pick up to 4.3 percent this year, exceeding the government’s target range of 2 percent to 4 percent, it was expected to ease to 3.6 percent next year.
Inflation averaged 3.4 percent in the first quarter on the back of elevated energy costs.
Diokno said the Philippine banking system remained sound and stable throughout the pandemic, with credit and capital conditions supportive of growth and well above regulatory requirements.
The country’s external position remained strong with gross international reserves of $108.5 billion as of end-March. This was equivalent to 9.6 months’ worth of imports of goods and payments of services.
External debt was manageable at 27 percent of the gross domestic product in 2021, he said.
He said the usual sources of foreign exchange also continued to rise in 2021, including overseas Filipino remittances which increased 5.1 percent, business process outsourcing receipts which grew 9.5 percent and net foreign direct investments which jumped by 54.2 percent. Julito G. Rada
The BSP, in support of the post-pandemic recovery, carried out a wide range of monetary and regulatory measures, which included enhancing market confidence and ensuring adequate liquidity and credit, complementing government programs through extraordinary liquidity measures and implementing regulatory and operational relief measures.
“All these have contributed to helping the Philippine economy get back on track in 2022,” Diokno said.
The economy grew by 5.7 percent in 2021, a turnaround from the 9.6-percent contraction in 2020.
The government expects the GDP to grow between 7 percent and 9 percent in 2022, driven by the massive vaccination program that could further spur consumer and business confidence.