Monday, October 22, 2018
  • share this

IMF upbeat on PH economy

By: - Reporter / @bendeveraINQ
/ 12:16 AM February 27, 2017

The International Monetary Fund expects the Philippines to sustain robust economic growth this year and match the 6.8-percent expansion posted last year as long as it pursues tax reform and lifts the quota on imported rice.

“The economic outlook continues to be favorable, although subject to external headwinds. In 2017, growth is projected at 6.8 percent on continued strong domestic demand and a mild export recovery,” an IMF mission led by Luis E. Breuer said in a statement after a visit to Manila on Feb. 20 to 24.


Breuer noted that last year, the 6.8-percent gross domestic product (GDP) growth was “led by strong domestic demand that more than offset the drag from net exports,” such that the economy remained resilient to external shocks.

Also in 2016, “investment expanded rapidly reflecting higher public infrastructure spending and private construction,” Breuer noted.


For this year, Breuer said “inflation is expected to rise to 3.6 percent due to higher commodity prices, pass through from currency depreciation, and strong economic activity.”
The IMF’s inflation forecast is within the government’s 2 to 4 percent target range but higher than 2016’s full-year average of 1.8 percent.

“Higher infrastructure and social spending is expected to increase the budget deficit to 3 percent of GDP” in 2017, Breuer added. The Duterte administration’s wider budget deficit program was aimed at addressing the infrastructure gap.

Breuer said the Philippine government’s fiscal policy was “appropriately focused on the medium-term objectives of addressing the infrastructure gap and inequalities and should be supported by public financial management reforms.”

Hence, “passing the first package of the comprehensive tax reform proposal is critical to sustain the rise in expenditures targeted in the medium-term fiscal framework, which is anchored on a 3-percent-of-GDP deficit,” Breuer said.

As for monetary policy, it “remains supportive of growth while the introduction of the interest rate corridor has strengthened monetary transmission,” he said.
For Breuer, the Bangko Sentral ng Pilipinas “should remain vigilant to signs of overheating or an undue acceleration of credit growth” even as he noted that the financial sector “continues to remain sound,” citing a recent move of the BSP to reduce concentration risks in the banking industry by allowing the exemptions on the single borrower’s limit to lapse.

Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, economy, International Monetary Fund, Philippine news updates
For feedback, complaints, or inquiries, contact us.

Sandiganbayan checkmates Pichay over chess gambit

October 23, 2018 05:33 AM


News Briefs: Oct. 23, 2018

October 23, 2018 05:32 AM


Palace, admin allies denounce IPU ‘meddling’

October 23, 2018 05:30 AM


Mayors on narc list seek reelection

October 23, 2018 05:20 AM


Almazan shows up

October 23, 2018


Still top draw

October 23, 2018


Mayors on narc list seek reelection

October 23, 2018

© Copyright 1997-2018 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.