A BUSINESS chamber said the economy would probably grow by as much as 7.5% this year, thanks to continuing reforms, increased infrastructure spending and a benign inflation environment.
“We at the Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. are optimistic about strong and resilient Philippine economic growth of 6.5% to 7.5%,” chamber President Henry Lim Bon Liong told reporters at a forum on Friday.
The businessman cited increased domestic and foreign investments, continuing economic reforms, a benign inflation rate and higher infrastructure expenditure.
The forecast matches the government’s 6.5% to 7.5% growth target this year until 2022.
The expected enactment of this year’s national budget on Jan. 6, though a week late, was unlikely to stunt growth, another business chamber said.
“This will definitely be a better year,” Philippine Chamber of Commerce and Industry Chairwoman Alegria Sibal-Limjoco told reporters at a forum on Friday. “First, the budget is going to be signed on Monday. So we have a P4.1 trillion budget, plus the P400 billion that was not used for 2019.”
Ms. Limjoco also said a robust tourism sector could boost the economy.
Mr. Liong cited the need to build more hotels given the influx of Chinese tourists. “The two million Chinese tourists coming here is just a drop in the bucket,” he pointed out.
Alexander R. Magno, a political science professor from the University of the Philippines, said the economy was unlikely to be affected by a global economic slowdown because of domestic consumption.
“The year 2020 will probably be one of the best economic years we have on record,” Mr. Magno said. “Even if our exports declined in the last two years, the economy continued to grow,” he pointed out.
He said local consumption, which is fueled by public spending and dollar remittances from Filipinos overseas, has shielded the local economy from shocks.
President Rodrigo R. Duterte’s infrastructure program will have “palpable effects” on the economy this year, Mr. Magno said. “I share the earnest optimism that the economy will grow by 6.5% and possibly as high as 7.5% despite the global slowdown.”
The government should address the shortage in skilled workers, which constrains growth, Mr. Magno said. The risk of inflation become higher because of the labor shortage, he said.
A labor shortage often causes inflationary pressure. Workers are in a position to demand higher wages if companies struggle to employ sufficient labor, which can lead to higher inflation. — Jenina P. Ibañez