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BSP: Investors urged to set eyes on Philippines, Asia's next economic powerhouse

MANILA, Philippines, May 7, 2019 /PRNewswire/ -- Investors from different parts of the globe are encouraged to set eyes on the Philippines, an economy that has sustained robust growth over the years despite external headwinds and that is well positioned to become Asia's next economic powerhouse, according to the central bank of the Philippines -- Bangko Sentral ng Pilipinas (BSP).

Secretary Carlos G. Dominguez III (Cabinet Secretary, Department of Finance, Republic of the Philippines) at the Philippine Day Forum during the World-Bank Meetings in Washington, D.C.
Secretary Carlos G. Dominguez III (Cabinet Secretary, Department of Finance, Republic of the Philippines) at the Philippine Day Forum during the World-Bank Meetings in Washington, D.C.

 

Bangko Sentral ng Pilipinas (Central Bank of the Philippines) Governor Benjamin E. Diokno talks about the solid fundamentals of the Philippine economy to the top investors and key business representatives at the Philippine Day forum in Washington
Bangko Sentral ng Pilipinas (Central Bank of the Philippines) Governor Benjamin E. Diokno talks about the solid fundamentals of the Philippine economy to the top investors and key business representatives at the Philippine Day forum in Washington

 

L-R: Mr. Ndiame Diop (Head of Macroeconomics, Trade and Investment Global Practice for South East Asia and Pacific Region, World Bank), Secretary Ernesto M. Pernia (Cabinet Secretary, The National Economic and Development Authority, Republic of the Philippines), Mr. Suahasil Nazara (Chairman of the Fiscal Policy Agency, Indonesia’s Ministry of Finance), Secretary Carlos G. Dominguez III (Cabinet Secretary, Department of Finance, Republic of the Philippines)
L-R: Mr. Ndiame Diop (Head of Macroeconomics, Trade and Investment Global Practice for South East Asia and Pacific Region, World Bank), Secretary Ernesto M. Pernia (Cabinet Secretary, The National Economic and Development Authority, Republic of the Philippines), Mr. Suahasil Nazara (Chairman of the Fiscal Policy Agency, Indonesia’s Ministry of Finance), Secretary Carlos G. Dominguez III (Cabinet Secretary, Department of Finance, Republic of the Philippines)

In 2018, the Philippine economy grew by 6.2 percent, with all of its 17 regions registering expansion. Also, the economy had posted growth above the 6.0-percent mark for the past 15 consecutive quarters. This is despite challenges posed by the global economy, including trade tensions between major economies.

Philippine economic officials including the Central Bank's Governor presented strengths of the economy during the Philippine Day Forum held last April 11 at the sidelines of the IMF-World Bank meetings in Washington D.C.

The event was attended by about 150 executives from banks, as well as investment and financial companies.

"Today, the Philippines is one of the fastest growing economies in the world. Reaching this milestone... is attributable to many years of hard work -- especially in building a strong fiscal position and a bureaucracy honed to the task of catalyzing growth," said Philippine Finance Secretary, Dominguez, during the forum, which carried the theme "Powering Progress through Transformative Reforms."

Dominguez added, "While we rank as among the best performing economies in this dynamic part of the world, growth is not the final goal of all our efforts. We seek a more dynamic and competitive economy to bring down poverty rates and create more opportunities for our people. The economic team stands by its goal of bringing down poverty incidence from 21.6 percent in 2015 to just 14 percent by the end of President Duterte's term."

At the event, the Philippine economy's resilience and capacity to sustain robust economic growth moving forward -- despite rough tides from the external environment -- were underscored.

"We are prepared to face the three great challenges - growth divergence, policy fragmentation, and technological disruption. For the Central Bank, it is a matter of careful commitment and timely action. The economy itself is fundamentally solid. Overall macro-economic conditions provide sound basis for cautious optimism," BSP Governor, Benjamin Diokno, emphasized.

"Growth divergence" refers to differences in growth performances, more so of major economies, that affect overall global economic performance and, therefore, that of emerging markets. "Policy fragmentation" is the state of having diverse opinions on policy agenda, which results in longer policy-making process. "Technological disruption" is the rise of new technologies that pose risks, such as on cyber security.

Dr. Victoria Kwakwa, World Bank's Vice President for East Asia and Pacific, echoed the same message on the Philippines' resilience in her opening remarks: "The Philippines has the potential to become the next East Asian success story," and that its vision to "become a prosperous, resilient, middle-class society free of poverty by 2040," is "an achievable goal – but one that will require continued reform and investment to open the economy, overcome infrastructure backlog, invest in human capital, and build the resilience of the nation, especially as the threat of climate change increases."

An Indonesian official who participated in the event recognized efforts of the leadership in the Philippines to implement important reforms, such as on taxation, which helps raise additional revenues to fund development initiatives of the government.

"Of course, tax reform is not the objective in itself. It is a tool to have a good and healthy budget. If we have a good and healthy budget, that means we are not only collecting money but also spending money in a wise way. So... the connection between tax and social spending [in the Philippines], I think, that is very well recognized," remarked Mr. Suahasil Nazara, Chairman of the Fiscal Policy Agency of Indonesia's Ministry of Finance.

Ms. Lalita Moorty, World Bank Director of the East Asia and the Pacific Macroeconomic, Trade and Investment GP, observed, "This reform effort in the Philippines is done in a very proactive, forward-looking manner."

The Philippines is expected to graduate into an upper middle income economy this year, ahead of the government's 2022 target.

Photo - https://photos.prnasia.com/prnh/20190503/2455496-1-a
Photo - https://photos.prnasia.com/prnh/20190503/2455496-1-b
Photo - https://photos.prnasia.com/prnh/20190503/2455496-1-c

Source: Bangko Sentral ng Pilipinas (BSP)
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