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Philippines: ‘Fiscal support to fix shaky growth’
As curbs, surging virus cases temper GDP growth
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said more fiscal support and a faster vaccination rollout are crucial as economic recovery remains tentative due to the surging COVID cases.
At an economic briefing organized by ANZ Research, BSP Deputy Governor Francisco Dakila Jr. cited the gradual economic recovery in the second quarter as the country exited from recession that stretched five quarters.
“As overall momentum of economic recovery remains tentative due to threats of new virus strains, additional fiscal support and acceleration of vaccination program are critical in sustaining the recovery,” Dakila said.
Economic managers, through the Development Budget Coordination Committee (DBCC), have lowered this year’s gross domestic product (GDP) growth forecast to a range of four to five percent instead of seven to nine percent due to the intermittent lockdowns to slow the spread of the virus.
Dakila said the country’s macroeconomic fundamentals remain sound.
He added that elevated inflation in the country is due to transitory factors and is seen easing back toward the mid-point of the BSP’s two to four percent target in 2022 and 2023.
Inflation averaged 4.4 percent in the first eight months after accelerating to a 32-month high of 4.9 percent in August from four percent in July.
Based on its latest assessment, the Monetary Board sees inflation averaging 4.1 percent this year before easing to 3.1 percent in 2022 and 2023.
“In the coming months, the BSP believes that sustained monetary policy support for domestic demand should help the economy gain more traction,” Dakila said.
The central bank has affirmed its support to the economy by keeping its accommodative policy stance as long as necessary to ensure the country’s strong and sustainable economic recovery.
Source: https://www.philstar.com/business/2021/09/17/2127599/fiscal-support-fix-shaky-growth