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July 21, 2024

BSP tells investors Philippines’ economic rebound is sustainable

The Philippines assured foreign investors that the bounce back of the Philippines from the recession induced by the COVID-19 pandemic is sustainable.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno told institutional investors in separate conferences in Washington D.C. organized by Barclays, Bank of America Securities, and J.P. Morgan that the rebound is sustainable amid the country’s manageable inflation, stable banking system, and robust external position.

Diokno together with other Philippine economic managers are in the US for the 2022 Spring meetings of the International Monetary Fund-World Bank.

While inflation will average 4.3 percent this year and exceed the government’s target range of two to four percent, Diokno said that the consumer price index is expected to ease to 3.6 percent next year.

The BSP chief also emphasized that 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 remains strong with gross international reserves of $108.5 billion as of end-March, equivalent to 9.6 months’ worth of imports of goods and payments of services, and manageable external debt which stood at 27 percent of gross domestic product (GDP) last year.

The country’s usual sources of foreign exchange also continued to rise in 2021 – overseas Filipino remittances increased by 5.1 percent; business process outsourcing receipts grew by 9.5 percent; and net foreign direct investments jumped by 54.2 percent.

In support of the Philippines’ post-pandemic recovery, the BSP has carried out a wide range of monetary and regulatory measures, which include 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.