With the country’s strong macroeconomic fundamentals, stable gross domestic product (GDP) and manageable inflation rate, Finance Secretary-designate and outgoing Bangko Sentral ng Pilipinas (BSP) governor Benjamin Diokno said he doesn’t see any recession happening in the months to come.
Data from the Philippine Statistics Authority show that the country’s GDP for the first quarter grew by 8.3 percent on the strong showing of manufacturing, wholesale and retail trade; repair of motor vehicles and motorcycles, and transportation and storage. “I can say with confidence that there will be no recession in the Philippines,” Diokno said in a BBC Asia Business Report, reacting to the warnings of a recession in the United States and its potential spillover to the rest of the world.
Further, he noted that the Philippine economy has been growing at around 6.0 to 7.0 percent before the pandemic.
“The economy has recovered after a slowdown and contraction in 2020 — it bounced back to 5.7 percent last year. During the first quarter of this year, it grew by 8.3 percent, and there is a strong probability that we will hit 7.0 to 9.0 percent this year, as originally projected before the pandemic,” he further expounded.
In terms of gross international reserves, the outgoing BSP governor pointed out that GIR are hefty, which can service import requirements for almost 10 months, as well as there is a steady inflow of overseas Filipino remittances and business process outsourcing receipts, and even foreign direct investments (FDI) are rising.
As of the end-February, Philippine GIR have peaked at $107.98 billion from January’s $107.69 billion, OFW remittances surged by 3.2 percent in March, as remittances that coursed through banks stood at $2.59 billion in March, up from $2.51 billion in the same month in 2021, BSP records showed.
Meanwhile, Diokno insisted that to keep the Philippine economy on track, he said the central bank will continue to focus on its mandate of promoting price and financial stability.
He added that the BSP is supporting whole-of-nation efforts and game-changing reforms to further bolster the country’s ability to recover from the pandemic, which includes the recently passed economic liberalization laws that will help open the country to more FDI, thereby spurring job creation and fostering economic growth.
Among the laws passed by the Duterte administration to attract more foreign investors are the amended Retail Trade Liberalization Act which will lower the minimum paid-up capital for foreign corporations from $25 million to $500,000; the amended Foreign Investments Act, allowing foreign nationals to own micro, small, and medium enterprises with a minimum paid-in capital of $100,000 subject to conditions; and the amended Public Service Act that will allow up to 100 percent foreign ownership of public services, such as telecommunications, railways, expressways, airports and shipping industries.
Source: Daily Tribune