The Bangko Sentral ng Pilipinas (BSP) is confident that the Philippine economy can sustain the stellar growth it recorded in the previous quarters.
“We believe that the potential growth rate of the Philippine economy is up and our [growth]estimate now is between 6-percent and 7-percent GDP [gross domestic product],” BSP Governor Amando Tetangco Jr. said on the sidelines of the unveiling of the Security Bank Hall in the National Museum.
Tetangco cited investments and employment as the factors contributing to the higher potential growth of the economy.
“Yes, [we can be confident that the growth is sustainable], because we have increased investment that expands the absorptive capacity of the economy and we also have improvement in the employment,” he said.
Earlier, the government reported that the private sector is heavily investing in the country as the contribution to growth of private construction is at least three times that of public construction.
It added that other private-sector investments such as on durable equipment, expenditure in capital formation, contributed more to GDP growth than household consumption expenditure.
In terms of foreign-direct investments (FDI), latest BSP data showed that FDIs rose to $436 million in February 2013 reflecting an increasing optimism over the country’s growth potential despite uncertainties in the global economy.
“We will be including these factors and developments, particularly the GDP growth in our meetings as well as the development in liquidity flow, to get the overall picture of the environment,” Tetangco further said.
He also mentioned that these developments serve as the basis whether the central bank should change the country’s monetary policy stance or keep it unchanged.
“I think by our next meeting, [what we will be focusing on]is to develop some idea of where the paths are going,” he added.
The BSP governor continued that the country’s 7.8-percent first-quarter GDP expansion could also benefit the private sectors.
He said that because of the growing economy, private sectors can create new products that investors can acquire.
“These investment products can of course directed at generating funds that can be use for productive activity like etfs [exchange traded funds],” Tetangco added.
This way, he said that corporates will no longer be solely reliable to credits as they can raise funds from the stock markets and bonds markets.
“That is a quality improvement in the financial system because we have different options in raising funds,” he concluded.