Amid surging inflation, a weakening peso, and the growing trade gap, Restituto C. Cruz, assistant governor of the Bangko Sentral ng Pilipinas, says the nation is still well-positioned to sustain robust economic growth. According to the assistant governor, these issues are simply “growing pains” for the domestic economy and should potential risks materialize, “the Philippines has ample policy space to respond.”
Meanwhile, the World Bank became the third multilateral lender to downgrade its 2018 economic growth forecast for the Philippines, citing heightened external uncertainties and surging local inflation. GDP growth, however, was forecasted to accelerate in the second half of 2018 and in 2019, as election-related spending kicks in. The World Bank’s estimated 6.5% GDP growth is still below the government’s annual target of 7-8%.
In other news, the Department of Information and Communications Technology announced the final timetable for the selection of the country’s long-awaited ‘third telco’. Selection documents can be purchased for P1 million starting Monday (Oct. 8), while the deadline for submission and opening of bids are pegged for Nov. 7.
The Philippine manufacturing sector topped the region, with a Nikkei Purchasing Managers’ Index (PMI) of 52, beating out the 50.5 regional average as well as close competitors Malaysia and Vietnam (both tied at 51.5). PMI readings above 50 indicate business condition improvements, while readings below 50 signal deterioration. The monthly IHS Markit survey attributed this growth to robust domestic consumption, a rise in new orders, and “upbeat business confidence.” The Philippines last topped the region in December last year.
According to a survey conducted among executives of 114 local banks, the local banking industry is expected to remain stable over the next two years, with lenders planning to implement new fintech tools to increase digital operations and improve customer service. Of the bank executives who took part in the poll, 66.7% said they see the industry remaining stable in the next two years, while one-third expect the sector to grow “even stronger.”