By Malaya Business Insight, October 15 2018
Image Credit to Philippine Star
BALI NUSA DUA, INDONESIA – Philippine economic officials strengthened ties with international investors in a series of roundtable meetings on the sidelines of the 2018 IMF-World Bank Annual Meetings in Bali Nusa Dua, Indonesia.
The sessions coincided with a surge of positive investor sentiment as FDI inflows grew significantly by 52.1 percent in January to July 2018.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo and Budget Secretary Benjamin Diokno deepened understanding of the Philippine economy in closed-door presentations to potential investors over the course of the week.
The Philippines, as one of the best-performing economies in the world’s fastest growing region, is undergoing rapid growth and development due to its sound economic management, $180-billion infrastructure investment program, and resiliency.
With one of the youngest populations in an increasingly ageing world, the Philippines is on the cusp of reaping the benefits of a major “demographic dividend.”
Surveying the range of monetary and non-monetary measures being taken to temper inflation, Guinigundo stressed that the BSP will continue to sustain its vigilance with a strong tightening bias while maintaining a data-dependent approach.
He pointed to the numerous measures in place to address supply-side factors such as the price of food, which the BSP and the national government agree are the main factors behind the rise in inflation.
The briefing sessions provided an opportunity to update international investors on the progress of the Philippines’ $180 billion Build, Build, Build initiative.
The once-in-a-lifetime nation building program has gained considerable momentum over the last year, with 44 of the 75 largest projects already at the implementation phase, while 24 are at the development stage.
Build, Build, Build is currently unlocking the economic potential of the Philippines by removing historic infrastructure bottlenecks, creating jobs and connecting the Philippines’ 7,000+ islands to the opportunities of a more inclusive and growing economy.
Discussing the range of global economic challenges impacting the region, including rising oil prices, inflation, and pressure on emerging currency markets, Guinigundo said he and the delegates from the national government remain confident in the resiliency of the Philippine economy.
“The September data showed that core inflation had declined slightly, demonstrating that the BSPs decisive monetary policy decisions combined with a range of non-monetary actions were starting to have their desired effect,” the Deputy Governor said.
“Inflationary pressures in the Philippines will temper over the coming year and return within the target band of 2-4 percent by 2019.” said Diokno.
The Deputy Governor said that exchange rate movements of the peso are to be expected.
“When evaluating the strength of the peso, it’s important to look at the broader, global currency market. Compared against the currencies of our trading partners relative to inflation, the peso remains both stable and competitive,” he said.
“We are very confident in the underlying strength of our economy. The Philippines remains one of the best performing economies in the fastest growing region in the world. GDP growth remains strong, FDI inflows are at record levels, infrastructure investment is booming, and we have historically low levels of public sector debt,” he concluded.