Diokno tells world economic leaders: PH on sustained recovery (Sabong News)
Author
Lee C. Chipongian
Date
APRIL 24 2022
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno has affirmed before global investors and economic leaders over the weekend of the Philippines’ sustained recovery as the world enters post-pandemic growth.
Diokno IS currently in Washington D.C. for the annual spring meetings of the International Monetary Fund (IMF) and the World Bank Group, where he reported on the country’s manageable inflation despite it being above-the-target, the strong and stable banking system, and “robust” external position.
On Saturday, April 23, the BSP chief reiterated his confidence that the growth momentum that began in the second half of 2021 will endure even with the change in administration after the May 9 national elections which will name a new president of the republic. The government predicts a gross domestic product (GDP) growth of seven percent to nine percent this year, from 5.6 percent in 2021.
Diokno also made these assertions in separate discussions with institutional investors in conferences organized by Barclays, Bank of America Securities, and J.P. Morgan.
Diokno told investors that while Philippine inflation will average 4.3 percent this year which will exceed the two-four percent target set by the government for 2022 until 2024, but the inflation rate is expected to decelerate to 3.6 percent in 2023. By the end of the first quarter 2022, inflation has averaged 3.4 percent.
During the IMF-World Bank meetings, Diokno also emphasized the local banking system’s continued “sound and stable” conditions during the pandemic with “credit and capital” still supportive of growth and “well above regulatory requirements.”
The Philippines’ external position also remains healthy amid the pandemic with a gross international reserves of $108.5 billion as of end March.
Diokno also stressed the country’s manageable external debt at 27 percent vis-à-vis the GDP. As of end-December 2021, the outstanding external debt amounted to $106.43 billion, up by 8.1 percent from $98.49 billion in 2020.
The IMF and the World Bank Group annual spring meetings for 2022 started last April 18 and will conclude Sunday, April 24, Washington D.C. time.
In its latest World Economic Outlook (WEO) report, the IMF has raised its GDP forecast for the Philippines to 6.5 percent for 2022, higher than its previous estimate of 6.3 percent it announced in January, citing the country’s recovery momentum.
The country’s IMF project is the highest in the group of ASEAN-5 which includes Malaysia, Vietnam, Indonesia and Singapore.
IMF Resident Representative to the Philippines, Ragnar Gudmundsson, said in an email that the 6.5 percent GDP growth is achievable “notwithstanding some adverse spillovers from the virus resurgence in trading partners and the Ukraine-Russia crisis.” He also noted that “the output gap is expected to close in 2023 and the medium-term economic growth is forecast to return to the pre-pandemic rate of 6.5 percent by 2024.”
Meantime, Gudmundsson said the next Philippine president should adopt “steadfast implementation of structural reforms” not only to aid the post-COVID-19 recovery but also to “help reduce inequality and strengthen resilience to natural disasters.”
He emphasized continuity and that the next president should continue efforts started by past administrations in streamlining the ease of doing business and to “reduce infrastructure gaps (to) help rekindle investment and new businesses, thereby helping offset long-term scarring effects on employment.”
“These efforts should be combined by targeted training and education efforts, which would facilitate labor movement across sectors. Increased spending on social protection, particularly health and education, further strengthening public service delivery, and meeting commitments on climate change would foster more inclusive and greener growth,” said Gudmundsson.
