BUSINESS sentiment remains positive with the economy continuing on its growth trajectory and liquidity abundant due to the central bank’s expansionary measures, the head of BDO Unibank, Inc. said.
“I’m quite optimistic because… the next generation is really coming up and frankly the economy is in a good spot, we have growth and it’s broad-based so we just have to look at the positives,” BDO Unibank President Nestor V. Tan told reporters on the sidelines of an event in Makati City yesterday when asked for his views on the state of the business sector.
The economy grew 6.2% in the third quarter, picking up from the muted 5.5% growth in the first semester as well as the 6% registered a year earlier.
Socioeconomic Planning Secretary Ernesto M. Pernia said that it will take 6.7% growth in the fourth quarter to achieve the low end of the 6-7% 2019 target, which he said was a “challenge” that is nonetheless achievable.
Mr. Tan said that the private sector will be a “big help” in ramping up implementation of the government’s infrastructure program.
In its revised list of flagship programs, the government listed 100 works compared with the previous total of 75, cancelling projects deemed no longer feasible while including “small but game-changing ones.” The list also included more projects funded by public-private partnership (PPP) to 29 from the previous 9.
“I guess we need a lot of infrastructure investment so the more people participating in it the better for us as long we don’t choke with so many projects simultaneously. Bringing in the private sector would be a big help,” he said.
With the new list, the infrastructure program will cost P1.77 trillion for PPPs, and P2.31 trillion for the 49 projects financed through official development assistance (ODA). The remaining 22 projects worth P167.95 billion will be financed via the national budget.
Mr. Tan, who was recently named the Management Man of the Year 2019 by the Management Association of the Philippines, also said that to sustain the growth, the economy will need the liquidity boost provided by the central bank.
On Friday, the Bangko Sentral ng Pilipinas said interbank borrowing will no longer be classified as deposit substitutes subject to reserve requirements under the new Bangko Sentral ng Pilipinas (BSP) Charter.
The move to exclude such borrowing from the reserve requirement of banks and quasi-banks “will result in freed-up liquidity” which can be used for other lending and investment activity, it said.
“I don’t know how much it will introduce into the system but I’m quite positive with that move because I think the economy needs the liquidity now to support the growth so that will be a big help,” Mr. Tan said. — Beatrice M. Laforga
