TO those who are taken aback or are skeptical about Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno’s bold assertion that the Philippines is ’’capable of sustaining long-term economic growth of 6.5 percent,’’ we advise them to read the story alongside the following recent stories:
1. According to Reuters, China’s third quarter economic growth slowed more than expected, and to its weakest pace in almost three decades. Gross domestic product (GDP) rose just six percent year on year, marking a further loss of momentum for the economy from the second quarter’s 6.2 percent growth.
2. Singapore has cut its official growth forecast for the second quarter running, on a flat economic performance in the first half of the year. Its GDP is likely to come in between zero growth and 1 percent for the full year, the island republic’s Ministry of Trade and Industry said.
3. Similarly, Hong Kong, in the midst of its current democracy protests and political turmoil, is projected to slide into recession this year.
Some of our Association of Southeast Asian Nations (Asean) neighbors and partners — Malaysia, Indonesia and Thailand — are charting nowhere close to our steady level of 6 percent growth.
With this evident growth map in East and Southeast Asia, BSP governor Diokno is clearly not fantasizing in his economic forecast.
Because of a long list of structural reforms that started way back in the 1990s, the Philippines has come a long way from the time when it was patronizingly called ’’the sick man of Asia.’’ It is incontestably one of the fastest growing and most resilient economies in the world today.
Better still, the country’s prospects are projected to be even better down the road.
Despite the threat of protectionist policies and geopolitical tensions in the world, the Philippine growth narrative remains very positive.
The BSP chief says the country’s economic growth is solid and sustainable.
“The Philippines recorded its 82nd consecutive quarter, or roughly more than 20 years of uninterrupted economic growth in the second quarter of 2019. This shows that we have managed to sail through the toughest external challenges from the Asian financial crisis to the global financial crisis.”
On the production side, Diokno says economic growth was propelled mainly by the robust performance of the services sector, while broad-based expansion in household consumption and government spending reinforced growth on the demand side.
He adds that the Philippines’ Build Build Build program will usher in the country’s “Golden Age of Infrastructure,” which gives added push for the economy’s productive capacity to expand further.
The macroeconomic picture is excellent, Diokno says. “The country has been making considerable progress toward achieving its macroeconomic goals. Looking ahead, prospects for the domestic economy continue to remain favorable as domestic growth fundamentals are expected to remain intact. GDP expansion is expected to continue to pick up in 2019 due to the robust growth in the services and industry sectors.”
He said private demand is expected to remain firm, aided mainly by sustained remittance inflows and stable inflation.
“As more government infrastructure programs get under way, the positive spillover effects on private capital formation would also contribute to economic growth,” he said.
Finally, according to him, the country’s inflation also remains low and fully manageable.
And we have been doing things right for 20 years now.