THE Philippines is still on track to meet its target economic growth rate of 6-7% either in the second half of 2019 or in 2020 assuming the 2020 Budget is passed on time and that the Bangko Sentral ng Pilipinas (BSP) eases rates as expected, the Bank of the Philippine Islands ( BPI) said.

In the bank’s 2020 Economic and Financial Markets Outlook Media Round Table, BPI Lead Economist Emilio S. Neri said the government has realized gains due to reforms like rice tariffication, the first package of tax reform, known as the Tax Reform for Acceleration and Inclusion (TRAIN), and the government’s crackdown on tax evaders.

Mr. Neri, however, believes that the government can do more on reducing poverty, job creation, and competitiveness.

BPI forecasts gross domestic product (GDP) growth in 2019 and 2020 of 5.9% and 6.4%, respectively, compared with 6.2% in 2018. Mr. Neri said the weakening of growth follows a global slowdown that has been hitting even domestic trade-oriented countries like India.

“India is like the Philippines to a large extent because it’s very domestic oriented… and yet its economy slowed down from periods of 7.5% growth all the way down to just 5% in the second quarter. So, you should not be surprised if the Philippines is struggling to grow at 6% again, given the other domestic based or domestic-driven economies like India actually suffered,” he said.

S&P Ratings reduced further its growth outlook for the Philippines to 6% from its already downgraded outlook of 6.1% released in June and a 6.3% forecast made in April, which in turn was downgraded from a 6.4% estimate issued in December 2018 and 6.6% in November 2018. In 2020, S&P sees GDP at 6.2%, down from its previous outlook of 6.4% and an even earlier forecast of 6.5%.

“Growth in emerging-market economies remains subpar, stemming from trade frictions, weakening external demand, geopolitical and in some cases domestic policy uncertainties,” S&P said in a report Thursday.

Aside from the slowdown hitting the Philippines, Mr. Neri said the aggressive front-loaded borrowing of the Bureau of Treasury had been parked with the central bank until July, fueling a “massive domestic liquidity squeeze.”

“…it may have practically negated the two percentage point reduction in the reserve requirement ratio,” he said, noting that the muted growth in money supply in the face of all the easing supports this view.

Mr. Neri said another reserve requirement cut could still be in the cards.

“Maybe one more, although it’s a little bit tight because the implementation of the last one is… November. Probably one more but we’re not giving it more than 50% chance… again another percentage point,” he told reporters, noting that there are two more meetings left for the Monetary Board — one on Nov. 14 and another on Dec. 12. — Luz Wendy T. Noble