PH economy seen resilient vs. risks
by FFE PH News staff
A report presented by the International Monetary Fund for the just-concluded G20 Summit showed that the growth that emerging economies have been experiencing may soon be reversed. However, an expert is confident that the Philippine economy will remain stable.
In the IMF report on “Update on Global Prospects and Policy Challenges,” emerging economies may be vulnerable as the US Federal Reserve ends its stimulus programme. This move, along with a growing number of political concerns in certain countries, has seen an increase in capital losses among emerging economies, including the Philippines.
However, IMF resident representative Shanaka Jayanath Peiris said that the market pressures have been mainly felt by emerging economies with important vulnerabilities while stronger emerging economies like the Philippines remain resilient.
Peiris said that the Philippines’ growth forecast for 2013 and 2014 was raised by the IMF from 6 percent and 5.5 percent to 7 percent and 6 percent respectively. So far, the Philippine government’s target of 6-7 percent growth continued to be met. In addition, the first semester hit 7.6 percent this year.
On the other hand, inflation remains under control despite the strong economic growth.
Peiris said that the impact of the market pressures will have a limited effect on the country because Philippine central banks and monetary authorities have enough reserves in international currency to counter the loss of capital. In addition, remittances provide a cushion as it increases domestic purchasing power.
However, spending can rise for companies, which means that investment growth may be moderate.