BSP sees ‘smooth’ political transition

Monetary authorities expect strong economic growth to continue in the long-term alongside expectations of a “smooth” transition to the next administration in June.

In a speech at the Credit Management Association of the Philippines’ 35th National Credit Congress Friday, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo noted that all presidential aspirants shared the same views with regards pressing economic concerns—they wanted to address the lack of infrastructure, further increase foreign direct investments as well as sustain the conditional cash transfer (CCT) program as an immediate assistance to the poor.

“We expect a smooth political transition by June. I don’t see any reason why anyone of them will reverse the momentum,” Guinigundo said.

The BSP official added that he believed no one among the five presidential bets would want any reversal in the investment-grade status and credit-rating upgrades that the country now enjoyed to happen within their term.

Guinigundo said ongoing “political fireworks” ahead of the next month’s elections would not deter the economy from growing sustainably in the long-term, noting that the country was in a “position of strength” to withstand external shocks following reforms that strengthened macroeconomic fundamentals.

While historically, markets get jittery during election season, Guinigundo said such volatility was usually a “knee-jerk reaction.”

“But once they are able to digest the essence of what the candidates intend to do, then comes the period of calm,” he said.