Philippine economic managers said the 6.1 percent growth of the economy in 2014 reflects the country’s strong macroeconomic fundamentals, but, they said the government remains watchful as risks to growth remain.
“We remain vigilant against risks from the global front,” Socioeconomic Planning Secretary and National Economic and Deve- lopment Authority (NEDA) Director General Arsenio Balisacan said.
Balisacan said current global economic conditions still exhibit mixed signals including sluggish world trade, muted commodity prices, and rising interest rates and risk spreads in many emerging market economies, in contrast to the persistently low interest rates in major advanced economies.
“The sharp deceleration of petroleum prices beginning the second half of 2014 is benefitting oil-importing economies but is tempering the growth prospects of oil-exporting countries. The net effect to global growth, however, is positive,” the NEDA chief said.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco said the rebound in the fourth quarter GDP, which puts full year growth at 6.1 percent reflects the underlying strength of the country’s domestic aggregate demand.
“We will refresh our forecasts to include this new development, oil price expectations, shifts in interest differentials and global investment sentiment, and assess if there’s any change in the balance of risks to inflation, then formulate adjustments to policy stance as needed,” he said.
Meanwhile, Finance Secretary Cesar Purisima said the GDP figures resoundingly affirm that the Philippine economy is on an upward growth trajectory buoyed by strong macroeconomic fundamentals.
“Uneven global growth and varying monetary policies precipitate higher market volatility, differentiating the fundamentally strong economies from the weak ones,” he said.
Purisima said the Philippines’ solid macroeconomic fundamentals, however, proves it has more fundamental strength than most peers to fuel long-term growth prospects and buttress against vulnerabilities to external shocks,
“The government remains fully committed in generating new investments to sustain our rapid growth in the long term. We are confident our continuing efforts to decongest the ports and to develop our infrastructure will further unlock our growth potential,” he added.
The Finance chief, on the other hand, said that priority bills in Congress, including the proposed fiscal incentives rationalization and the amendments to the Build Operate Transfer Law and the Foreign Investments Negative List, once passed, are expected to further fuel growth over the medium term.
“Consistent with the reform-oriented character of this administration, we are working to draft a comprehensive tax reform package to re-engineer a more competitive and equitable economy. We expect our sustainable reform initiatives to further power our ascent in an already virtuous cycle of inclusive growth for all Filipinos,” he concluded.