THE economy has ample buffers to shield itself from the adverse effects of the unrest in Mindanao as the business analysts and traders are still favoring the Philippines, an official said Friday.
In a press conference in Davao City, Presidential Spokesman Ernesto Abella echoed Finance Secretary Carlos Dominguez who earlier said martial law would not have any adverse effects on the economy.
“The country’s solid macroeconomic fundamentals buoyed the stock market and the peso despite President [Rodrigo] Duterte’s declaration of martial law in Mindanao,” Abella said quoting Dominguez.
He made his statement even as Business Monitor International, a unit of the Fitch Group, said Friday the declaration of martial law in Mindanao would not have any significant impact on the Philippines’ growth momentum.
BMI also did not see Duterte’s move as “a prelude to a return of dictatorship in the Philippines.”
Accordingly, BMI downgraded the Philippines’ short-term political risk index score to 63.1, out of 100 from 63.5 previously.
BMI earlier this month kept its earlier growth forecast for the Philippine economy this year at 6.3 percent, saying the robust expansion could be sustained in the months ahead due to the government’s expansionary plans and improved business environment.
BMI said the Philippine economy had the potential to grow at an average of six percent “over the coming years” because of the factors it cited.
On Thursday, Finance Secretary Carlos Dominguez III downplayed any possible impact on the economy of the declaration of martial law in Mindanao, saying the 6.5-to-7.5-percent growth target this year remained possible.
The same day, the Philippine Stock Exchange Index added 33.83 points or 0.42 percent to close at 7,871.65, while the peso ended stronger against the greenback at 49.83 from 49.995 the previous day.
Abella likewise stressed the position of National Treasurer Rosalia De Leon who said the Philippines’ ample buffers position the country to weather changes in the global environment.
“We continue to increase our reliance on peso funding, taking advantage of ample liquidity,” she said.
Abella said the rest of the country were doing very well, “considering the fact that the fundamental and the general direction is quite healthy and in fact solid.”