IMF upgrades growth forecast for Philippines

Visiting International Monetary Fund Managing Director Christine Legarde gestures while answering questions from the media during a news conference Friday, Nov. 16, 2012 at Malacanang Palace in Manila, Philippines. Legarde lauded the Philippines for transforming the country from being a “borrower” to a “small creditor.” AP

MANILA, Philippines—The Philippines is probably the only country for which the International Monetary Fund is upgrading its growth forecast for 2012, the IMF’s managing director Christine Lagarde announced at a Malacañang news briefing Thursday.

While the economies of Europe and the United States are mired in recession, the Philippines is on the road to economic growth in excess of 5 percent this year, Lagarde said.

“I congratulated the Filipino authorities for their excellent economic stewardship during difficult times. In the last decade, the Philippines managed to have an average growth of about 5 percent,” Lagarde said. “And you will be interested to know that this year, 2012, at a very difficult time because of the financial crisis in other parts of the world, the Philippines is probably the only country of which we have increased the growth forecast as opposed to other places in the world where we actually decreased our forecast.”

The Aquino administration has set a growth target of between 5 and 6 percent this year, 6 and 7 percent in 2013, and at least 7 percent in the succeeding years.

Lagarde’s remarks gave credence to a statement visiting Canadian Prime Minister Stephen Harper made last week that the Philippines was “an emerging Asian tiger.”

Officials of other first-world countries such as Australia had earlier arrived at the same observation, with the business establishment led by Asia Society Australia telling the President, during a state visit to Australia last moth, that the Philippines was now “the fastest-growing economy in Asia.”

Lagarde said she knew that the growth in 2012 would be “way in excess of five percent” even as the IMF looked forward to the country’s growth rate for 2013 being in the range of 5 percent, as well.

Lagarde credited this robust economic growth of the country—once the basket case of Asia—on the two-year-old Aquino administration’s fiscal reforms.

“This is due in no little part to the excellent policy mix deployed both by the secretary of finance and the Central Bank of the Philippines, and the combination of sound fiscal policy as well as sound monetary policy,” she added.

However, she said, she hoped for more “inclusive growth” that would trickle down to the poor.