Citi sees ‘green shoots’ in PH economy

As the country strives to shift gears from pandemic to endemic COVID-19 management, “green shoots” are emerging in the economy and financial markets remain favorable for businesses wanting to raise fresh funds to resume expansion activities.

In a briefing on Wednesday, Citi Philippines treasurer and head of markets and securities services Paul Favila said it was too soon to project when the country would return to prepandemic economic productivity level but there had been a “fair amount of resilience.” Favila said the impact of booming digital platforms might be something that had yet to be captured by the traditional gauge of economic activities. “Maybe the correlation has weakened, because you could see how the online platforms have evolved and you can do everything that you need to do right now without actually stepping out of your homes, which means there is some recovery,” Favila said.

“As far as consumption is concerned, we’re seeing it in a very different way … They’re getting back,” he said.

On monetary policy, Favila said the Philippines would be one of the economies that would likely maintain accommodative interest rates for an extended period of time.

Local interest rates are at record-low levels, with the overnight borrowing rate of the Bangko Sentral ng Pilipinas kept even lower than the prevailing interest rate to support growth.

Favila noted that the economy in general was “getting itself comfortable with this new normal, and it is moving ahead.”

Also, primary issuances of debt paper across the region remained robust.

Since the start of the pandemic, 18 corporate issuers of foreign exchange debt securities from the Philippines have come to market with an average size of $600 million, all of which had been successful, Favila said.

“From there, we could glean, the available capital our corporates have, all waiting for deployment at the right time. So I guess they have their ammunition ready for that,” he said.