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Sunday, March 5, 2017
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MANILA – The Philippine economy is on a ‘monotonic upswing’ despite a depreciating peso, Socioeconomic Secretary Ernesto Pernia said on Friday.
“The growth trajectory of the Philippine economy has been on a monotonic upswing; meaning, consistent over the years,” Pernia said in a business forum at the Manila Peninsula in Makati City.
Despite a weak peso trading at a more than 10-year low at P50.40 to $1, there is nothing alarming about that, said Pernia, who is also director general of the National Economic and Development Authority.
The peso hit a fresh low of more than 10 years against the dollar on Friday, mainly on higher probability that the Federal Reserve will raise interest rates this month.
“It’s not a one sided negative, current movement of the currency. Because, on one hand, you profit from exports, you profit from BPOs and the family recipients of remittances, they also gain,” Pernia said in a separate interview reporters.
“It’s not really much of a depreciation, if you look at the currency historical perspective, because there was a time when the Philippine peso hit as low as P56 to the US dollar,” he said.
“It’s not really something to be alarmed. I have confidence in the central bank, they are doing a good job in managing the currency,” he added.
DEFICIT-SPENDING
The Philippines is one of the fastest growing economies in Asia, registering a gross domestic product growth of 6.8 percent last year.
“The economy grew close to 7 percent in 2016 from 5.9 percent in 2015. This is on the high end of government’s growth target of between 6 to 7 percent for 2016,” Pernia noted.
“This makes the Philippines one if the fastest rising economies in Asia, and even the in the world today – faster than China and faster than Vietnam which grew by 6.2 percent last year, the Cabinet official said.
Last year’s output growth brought the seven-year moving average to 6.3 percent, the highest since 1978, Pernia added.
The Cabinet official is betting that economy could grow by 7.0 to 8.0 percent in 2022, coinciding with the end of the Duterte administration’s six-year term.
In a separate statement Friday, the Department of Finance noted the accelerated fiscal spending in the second half of 2016 contributed to the growth momentum.
“The Duterte administration’s decision to end years of public underinvestment and switch to higher deficit-spending mode has translated into more money spent on infrastructure, on education, health, skills training and other forms of human capital development, and on social protection for the poorest of the poor,” Finance Secretary Carlos Dominguez III was quoted as saying in the statement.
“This major policy shift, in turn, has allowed the national government to keep the domestic economy on the uptrend despite global market volatility,” he added.
The Philippines is no longer just a service sector or consumption driven economy, but is now increasingly being driven by investments. “We believe that the process of structural transformation in economy is taking place which is crucial to sustaining growth and generating more quality and stable jobs,” Pernia noted.
“The thing to note about this structural transformation of the economy is that it suggests that economic growth is sustainable,” he added. (GMA News)
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